V-Guard Q2FY23 PAT lower by -26.4% yoy at Rs43.66 crore due to a sharp spike in inventory costs in the quarter

V-Guard Industries Ltd reported 8.68% growth in total revenues for the September 2022 quarter on consolidated basis at Rs986.14cr.

Revenues were lower by -3.16% in sequential terms. In terms of the business verticals, the electronics goods vertical saw sales increase by 12.9% at Rs227 crore while the sales from electrical goods were absolutely flat at Rs422 crore.

The biggest growth in sales came from the consumer durables vertical which saw sales grow yoy by 13.2% at Rs337 crore.

The sharp increase in trade receivables and fall in trade payables led to a fall in net cash from operations by 20% at Rs227 crore in H1FY23.

Consolidated Profit after tax (PAT) for September 2022 quarter was down -26.4% at Rs43.66cr and it was down -18.3% on sequential basis.

Due to a spike in inventory holding costs amidst the supply chain constraints, the operating profits from the electronics business and the electrical goods business were down on a yoy basis.

However, the operating profits were higher for the consumer durables vertical. The  Net profit margins at 4.43% in Q2FY23 is lower compared to 6.54% in Q1FY22 and a robust 5.25% in Q1FY23.