V-Guard Industries Ltd Management Discussions

1. Economic Review & Outlook

The year 2024 was pivotal politically, with major elections in India, the United States, and Indonesia reshaping policy directions globally. In India, the electorate re-elected the incumbent government for a third consecutive term, ensuring policy continuity amid rising global uncertainties.

Globally, 2024 witnessed an uneven recovery. Service sectors remained relatively strong, while manufacturing lagged, particularly in Europe and parts of Asia, due to supply chain disruptions and softer external demand. Geopolitical tensions, including the Russia-Ukraine war and Middle East conflicts, heightened uncertainty across financial and commodity markets.

According to the World Economic Outlook Update, global GDP growth is projected at 3.3% for both 2025 and 2026, below the pre-pandemic average. Global inflation is expected to decline to 4.2% in 2025 and further to 3.5% in 2026. However, stubborn services inflation and challenges in achieving full disinflation complicate monetary policy globally. Globally energy prices are forecast to decline by 2.6% in 2025, driven by weaker demand and higher non-OPEC+ supply, while food and beverage prices are expected to rise globally due to adverse weather impacting key producers. Monetary policies are expected to diverge across regions, advanced economies are likely to move towards easing faster than emerging markets, reflecting different inflation and growth dynamics. Fiscal tightening is also anticipated across both advanced and emerging economies in 2025-26. Global risks remain elevated. The IMF notes heightened financial market volatility due to expected policy changes under newly elected governments. Structural challenges, including trade frictions, accelerated digital and environmental transitions along with other factors, continue to complicate the global growth landscape.

Indias economy demonstrated resilience despite global headwinds. In April 2025, the Reserve Bank of India (RBI) lowered the policy repo rate by 25 basis points to 6.0%, aiming to support investment and borrowing amid tighter global financial conditions. Inflation has moderated significantly, with retail inflation (CPI) falling to 3.34% in March 2025, the lowest since 2019, reflecting effective monetary management and supply-side interventions. Real GDP growth is projected at 6.5% for 2025-26, maintaining momentum from the previous year despite a slight downward revision due to global risks. Sectoral trends remain positive: agriculture activity benefited from strong reservoir levels and supportive weather conditions, manufacturing is reviving on improved business sentiment and services continue to drive growth. Investment activity is strengthening, driven by higher capacity utilisation, public infrastructure spending, and a robust financial sector. While merchandise exports may face challenges from global trade frictions and services exports, strong remittance inflows continue to support the current account balance. Inflation expectations remain anchored, with CPI inflation forecast at 4.0% for 2025–26, aided by healthy agricultural output and softening oil prices. However, risks from weather-related shocks and global volatility persists. Indias financial system remains stable, backed by healthy forex reserves, improved liquidity, and lower borrowing costs. The Ministry of Finance has warned that rising global trade tensions, especially under the renewed "America First" agenda of the U.S., could impact Indias export performance. However, Indias robust services trade surplus provides a mitigating cushion. At the same time, there is an emerging school of thought that India could be relatively better placed than most of the countries in terms of tariff rates which may provide opportunities to significantly scale up merchandise exports.

Domestically, Indias rural demand recovery and strong public capital expenditure are supporting growth. Investment sentiments have improved, with manufacturing capacity utilisation remaining above historical averages. However, risks from global overcapacity, particularly in sectors like steel, could pose challenges. In India, food inflation is expected to ease with strong seasonal harvests and healthy Rabi production, although adverse weather events could pose upside risks. The core inflation outlook remains benign, supported by softening global energy and commodity prices.

In summary, Indias growth outlook remains robust, underpinned by domestic resilience and disinflation trends, although global uncertainties, including geopolitical developments, trade dynamics, and financial market fluctuations, warrant careful monitoring. However, the recent India-Pakistan border tensions can disrupt trade, investment, and cross-border economic activity, particularly in border regions. Heightened military spending may divert resources from development and infrastructure. Tourism and local businesses near the border often suffer due to security concerns.

2. Sector Overview

The Indian consumer durables sector is rapidly growing and contributed about 0.6% to the nations GDP in 2024. With a projected CAGR of 11%, the sector aims to reach a market size of H 3 lakh crore (US$ 34.5 billion) by 2029.

The Appliances and Consumer Electronics (ACE) market is expected to nearly double by 2033, reaching US$ 149.1 billion. In 2025, India expects to become the fifth-largest global market for consumer electronics, with key segments like smartphones, air conditioners and white goods driving growth.

Key product markets are expanding significantly. The air conditioner market will reach US$ 5.6 billion by FY29, while smartphones are expected to grow to US$ 90 billion by 2032. The white goods market, valued at US$ 12.44 billion in 2023, will grow to US$ 19.09 billion by 2031. Other segments like headsets, dishwashers and wearables are also showing promising growth.

Growth is fuelled by rising disposable incomes, urbanisation and increased consumer credit. Additionally, the growing middle class and demand from rural and semi-urban markets are driving consumption and premiumization. The expanding online retail market and the working population are also significant contributors to the sectors growth.

The sector has evolved from a closed market in the pre-liberalisation era to a diverse and competitive landscape today. Key trends include increased product affordability, local manufacturing, and the growing importance of the digital economy. Manufacturers are focusing on sustainability, incorporating energy-efficient technologies and promoting recycling.

Technological adoption is a major driver for consumer goods. The digital economy is booming, with a rise in online shopping, smartphones and wearable tech. AI-enabled appliances are gaining popularity. The push for digital and smart technologies is aligned with Government initiatives like "Smart Cities" and "Digital India."

The Indian Government has introduced policies like the National Policy on Electronics (NPE 2019) and Production-Linked Incentive (PLI) schemes to boost local manufacturing and attract investments. These policies, along with reforms like labour law simplifications, are facilitating growth in the sector.

India is attracting significant foreign investment in the consumer durables sector, with major companies and brands expanding their operations in the country. These investments are strengthening Indias position as a key global manufacturing hub.

Sustainability is becoming a priority for the sector, with companies focusing on eco-friendly products and energy-efficient technologies. The Governments regulations are promoting greener practices, with the fan industry and energy-efficient appliances benefiting from new policies.

Indias consumer durables sector is on a robust growth trajectory, driven by demand, technological advancements and Government support. As the market evolves, India is set to become a global leader in the sector, with sustainability and innovation at its core.

3. Review of Operations

Financial Performance (FY20-25)

Key ratios (%)	FY25	FY24
Gross Margin	36.3%	33.8%
EBITDA Margin (excl. other income)	9.2%	8.8%
Profit after Tax (%)	5.6%	5.3%
Ad & Promotion Exp./ Revenue	2.9%	2.6%
Employee Cost/ Revenue	9.3%	8.3%
Other Expenditure/ Revenue	17.8%	16.8%
Tax rate	24.2%	24.3%
Diluted EPS (H)	7.14/-	5.88/-

 

Balance Sheet Snapshot (J in Cr)	31 Mar 2025	31 Mar 2024	31 Mar 2023
Net worth	2,097.83	1,814.22	1,607.62
Gross debt	10.81	291.03	419.61
Current Investments	10.14	30.17	0.12
Cash and cash equivalents	64.50	57.37	66.87
Net Cash Position	63.83	(203.49)	(352.62)
Fixed Assets	1,169.90	1,116.81	1,019.67

 

Balance Sheet Snapshot (J in Cr)	31 Mar 2025	31 Mar 2024	31 Mar 2023
Debtor (days)	35	44	50
Inventory (days)	102	92	97
Creditor (days)	67	62	62
Working Capital Turnover (days)	70	74	85
RoE (%)	15.0%	14.2%	11.8%
RoCE (%)	19.0%	15.7%	12.0%

 

Particulars	UOM	2024-25	2023-24
1 Debtors Turnover	Times	10.4	8.3
2 Inventory Turnover	Times	3.6	4.0
3 Interest Coverage Ratio	Ratio	17.9	8.7
4 Current Ratio	Ratio	1.7	1.6
5 Debt Equity Ratio	Ratio	0.0	0.2
6 Operating Margin i.e. EBITDA	%	9.2%	8.8%
7 Net Profit Margin	%	5.6%	5.3%
8 Return on Net worth	%	15.0%	14.2%

Note: Explanation if difference is more than 25%

Interest coverage ratio has improved from last year as the interest on borrowing for acquisition of Sunflame Enterprises Pvt Ltd. (Sunflame) is lower due to repayments during the year.

Debt equity ratio has improved compared to last year mainly due to repayment of term loan related to Sunflame acquisition in FY25.

4. Dividend

The Companys Board has recommended final dividend of H 1.50/- per share. This translates to a payout for the financial year

2024-25 of ~H 65.40 crore (H 60.91 crore in 2023-24). The dividend payout, for the year under review is ~21%.

The Company believes in maintaining a fair balance between dividend distribution and cash retention that may be required for future growth, synergistic acquisitions, meeting unforeseen contingencies and maintaining a healthy balance sheet position.

5. Segment-wise Review

	FY25	Contribution	FY24	Contribution	YoY growth
Products	H ( in Cr)	(%)	H ( in Cr)	(%)	(%)
Electronics	1,509.63	27.0%	1,165.20	24.0%	29.6%
Electricals	2,169.94	38.9%	1,973.07	40.6%	10.0%
Consumer Durables	1,643.87	29.5%	1,444.28	29.7%	13.8%
Sunflame	254.38	4.6%	274.12	5.7%	-7.2%
Grand Total	5,577.82	100.0%	4,856.67	100.0%	14.8%

Electronics

The Electronics segment comprises of Voltage Stabilizers, Digital UPS Systems (including Inverter Batteries) and Solar Power Systems. In FY25, it delivered a robust performance, supported by favourable seasonal trends and improved internal efficiencies. Demand was primarily driven by continued variability in regional power supply and increasing adoption of high-energy consumer appliances such as air conditioners, refrigerators and televisions which are factors that have steadily increased reliance on power management solutions.

During the year, the segment reported revenue of H 1,509.63 crore, reflecting a growth of 29.6% YoY as compared to H 1,165.20 crore in FY24. Growth was largely attributed to a stronger and extended summer season, which drove heightened demand for stabilizers and inverter-based systems.

Segment margins improved to 19.7%, up from 16.5% in FY24, supported by volume growth and a strategic shift towards increased in-house manufacturing across key product lines of Stabilizers, Inverters and Batteries. This move enabled better cost optimization and enhanced value capture. Margin gains were further augmented by a favourable market environment.

The Company is a market leader in the Stabilizers category, outperforming regional players with limited reach. During the year, the category witnessed robust momentum, driven by seasonal tailwinds arising from a strong summer and sustained underlying demand. Favourable market conditions, coupled with healthy channel dynamics, further supported growth.

Operationally, Stabilizers is backed by manufacturing facilities in Sikkim and Pantnagar, the latter being the first plant established under V-Guard Consumer Products Ltd. (VCPL), the Wholly-owned subsidiary of the Company. These plants support a wide range of offerings, including stabilizers designed for air conditioners, LED TVs, refrigerators, washing machines and treadmills – ensuring both product versatility and market responsiveness.

While the stabilizer market had experienced a post-COVID dip in CAGR to 4–5%, it has since rebounded to pre-pandemic levels of 4–6%. Looking forward, the category is poised for sustainable growth trajectory in the coming years.

The Digital UPS Systems category, encompassing Inverters and Batteries, has emerged as a key pillar in the Companys long-term growth strategy. With the Indian market grappling with low electrification in certain pockets, recurring power disruptions and energy supply gaps, demand for dependable backup solutions is accelerating. To capitalize on this opportunity, the Company has expanded its product lineup and undertaken capacity-building measures, aligning with the increasing power needs of Tier-2 and rural regions.

As part of this strategic focus, in addition to the inverter manufacturing facility at Pantnagar under VCPL, a new Battery Manufacturing facility was established, on the outskirts of Hyderabad under VCPL. This plant, which became operational towards the end of of FY24, is now fully functional and delivering strong output. The shift to in-house battery production has enhanced operational agility and reduced dependency on third-party suppliers, resulting in better cost structures and competitive pricing. These efficiencies are already translating into improved margins. VCPL plans to further invest ~ C 50 Crores for increasing the capacity of Hyderabad Battery plant.

The fiscal year 2025 witnessed a sharp rise in inverter sales, largely driven by prolonged heatwaves and resultant power outages. The Companys prior investments in manufacturing and distribution have enabled it to respond effectively to this uptick in demand, reinforcing its position in the Electronics domain.

To future-proof its technology portfolio, V-Guard has invested in Gegadyne Energy Labs Pvt. Ltd. (GEL), a Mumbai-based deep-tech startup developing advanced battery systems. GELs innovations focus on improving battery lifecycle, charging efficiency, safety, and maintenance. The company has moved from R&D to pilot-scale production and is preparing for commercial scaling and a potential ‘Series B funding round.

V-Guards investment supports GELs technology development and operational setup. This investment aligns with V-Guards broader strategy to integrate advanced energy storage technologies.

V-Guard also entered the solar energy space with its Solar Power Systems category. It provides a focused offering of on-grid and off-grid systems, aligning with the Indian Governments intensified efforts to promote solar rooftop adoption.

As per the Economic Survey 2024-2025, the Government has launched several initiatives to boost solar power use. The PM - Surya Ghar: Muft Bijli Yojana plans to install rooftop solar systems in one crore homes, aiming for about 30 GW of residential capacity by 2027. By early 2025, over 7 lakh households had systems installed. New rules introduced in 2024 have also made rooftop solar installation easier by removing certain approval steps and cutting down project timelines.

Large-scale efforts like the Solar Parks Scheme aims to build 40 GW of solar capacity through new parks and infrastructure. So far, nearly 39.9 GW have been approved across 13 states. PM-KUSUM helps farmers by funding small solar plants and solar pumps, adding decentralized power to rural areas.

Other programs include solar electrification for tribal villages, Government-supported solar projects through public sector units, and incentives to boost the local manufacturing of solar panels under the PLI Scheme. The Smart Cities Mission is also installing solar streetlights in urban areas, and Indian Railways plans to reach 30 GW of renewable energy by 2030.

To support growth, loans for solar projects are given priority and special green bonds have been introduced. The sector is also creating jobs, including opportunities for women through community solar programs. However, challenges like limited battery storage technology, shortages of critical minerals, and the need for better recycling of old solar equipments remain key areas for improvement.

In response, V-Guard has expanded its presence in solar rooftop solutions, a segment that, while currently modest in scale, is witnessing rapid growth. The Company has invested in both product innovation and service delivery, building a strong foundation to meet emerging demand.

The solar rooftop product line, integrated with inverters and battery systems, is gaining momentum as was particularly seen in certain regions, during the latter half of the fiscal year. Though its contribution to overall revenue remains limited, the segment is evolving into a promising growth avenue, supported by increasing consumer adoption and Government-led incentives.

The Electronics segment remains well-positioned to capitalize on structural shifts in energy usage patterns and increased electrification across urban and semi-urban markets.

Electricals

The Companys Electricals segment generates the highest share of revenue and encompasses product categories like Wires, Pumps, Modular Switches and Switchgears. The performance of the segment is closely linked to external factors such as construction activity, weather fluctuations, water table levels and shifts in consumer spending. In the fiscal year 2025, it generated revenue of H 2,169.94 crore, as compared to H 1,973.07 crore, a growth of 10.0% YoY.

The segment contributed 38.9% to the Companys revenue as against 40.6% in FY24. Segment margins for the year came in at 10.1%, slightly lower than the 10.8% achieved last year, with copper price fluctuations contributing to a drag on margins.

The Wires category, is the largest contributor to the revenue of the Company. The Company mainly operates in house wiring cable segment where demand is driven by electrification of houses and the growth in the real estate sector. With 90-95% of Wire sales coming from retail trade rather than institutional projects, stocking sentiment in the channel becomes a critical driver. Its performance is closely tied to movement in copper prices, which is the key input material. Copper price volatility has a direct bearing on both demand and inventory behaviour, making this segment particularly sensitive to external cost cycles. Nevertheless, price pass-through in this category is typically efficient, which helps to offset margin volatility.

The Company has expanded capacity in previous years and is well-equipped to meet expected demand over the next few years. With 100% in-house manufacturing structurally feasible in this category, it offers a strong long-term strategic advantage. V-Guard currently follows a blended manufacturing model, supported by its well-positioned facilities in Coimbatore and Kashipur, which offer the operational agility to respond swiftly to commodity-driven fluctuations. Outlook for the category remains optimistic, fuelled by expectations of heightened construction activities in near future.

The category of residential Pumps forms a significant part of Electricals segment, with demand largely influenced by seasonal patterns, especially during summer, when falling water tables typically drive higher sales. Pump is among the few products with a demand that leans more towards rural areas. Its market is largely dominated by local and regional brands and consumer awareness remains limited. As a result, purchasing decisions are often guided by retailers or plumbers. The category experienced steady growth in FY25.

Switches and Switchgears form a key pillar of the Companys long-term growth strategy, complementing its core Wires business and enabling a seamless extension into adjacent markets. Recognising the potential in this space, V-Guard acquired Simon Electric Pvt. Ltd. (SEPL) in FY23, a company affiliated with Spains Simon Group. By the following fiscal year, SEPL was fully integrated into V-Guards operations, with its systems streamlined and personnel fully absorbed into the organisation along with the manufacturing unit located at Haridwar, Uttarakhand. This strategic move has strengthened the Companys capabilities and positioned it for accelerated growth in the Switches category.

The Switchgear category has been performing well, with V-Guard gradually establishing itself as a preferred brand in this domain across several Indian states. With over a decade of groundwork in the market, the brand is now well-recognised among both trade partners and end-consumers.

With Simons brand license agreement as well as the technology collaboration agreement (with Simon Global), V-Guard aims to tap into the additional segments of the Switches market. The Company leverages Simons advanced manufacturing processes, high-quality standards and technology collaborations to enhance its offerings. By internalising a significant share of its switches production and laying out a strategic roadmap for wider distribution and platform innovation, V-Guard is positioned to scale this business aggressively. V-Guard remains positive of the long-term prospects of this category, backed by ongoing product development and a focus on quality and innovation.

Further strengthening its foothold in the switchgear space, V-Guard had invested in GUTS Electro-Mech Ltd. (GUTS), a Wholly-owned Subsidiary based in Hyderabad. GUTS specialises in the manufacturing and supply of essential electrical protection devices such as Miniature Circuit Breakers (MCBs) and Residual Current Circuit Breakers (RCCBs). These products play a critical role in ensuring electrical safety and align well with the Companys broader portfolio in power management and distribution.

Both Switches and Switchgears have the potential to deliver high growth for the Company. The Company is actively pursuing growth strategies to capitalize on synergistic benefits.

Consumer Durables

The Consumer Durables segment, comprising Fans, Water Heaters, Air Coolers and Kitchen Appliances, recorded revenue of H 1,643.87 crore in FY25, compared to H 1,444.28 crore in FY24, reflecting a year-on-year growth of 13.8%. The segment contributed 29.5% to V-Guards total revenue during the year, as against 29.7% in FY24. Segmental margins were at 4.2% in FY25 vs. 3.4% in the previous fiscal.

While there has been a moderate improvement in profitability, margins remain below pre-COVID levels, largely due to delayed pricing pass-through. However, the Company expects further enhancement in margins – particularly in Kitchen Appliances and Fans, as the new manufacturing facilities ramp up operations. Management remains focused on restoring Consumer Durables segment margins to historical levels.

Overall demand for Consumer Durables remained stable during the year. That said, the Water Heater category witnessed relatively softer demand mainly due to adverse weather conditions.

V-Guard offers a comprehensive range of Fans, including ceiling, table, pedestal and wall (TPW) models, blending advanced technology with elegant design. Continuous product innovation and timely launches have positioned the brand as a dynamic player in the market. With strong growth in premium offerings and positive consumer response, V-Guard continues to enhance its presence in a segment traditionally dominated by long-established players.

The Company currently operates a state-of-the-art fan manufacturing facility in Roorkee, focused on premium ceiling fans. This unit is nearing full capacity for liquid-painted fans. To support future growth and enhance operational efficiency, VCPL, Wholly-owned Subsidiary of the Company, is setting up new facility in Hyderabad by investing ~ H 100 crore, funded through internal accruals.

TheHyderabadplant,nowunderconstructionandexpected to begin commercial production in FY27, will manufacture both ceiling and TPW fans. With evolving Government policies, promoting manufacturing in India, V-Guard is proactively building domestic capabilities to ensure long-term supply security. In addition, the new facility aims to reduce dependency on non-exclusive third-party vendors by bringing manufacturing in-house, allowing for better control over quality, innovation and differentiation, which are key levers in a highly competitive market.

With a clear focus on scaling its premium product portfolio, and replicating the success of its Roorkee facility, V-Guard is well-positioned for long-term growth in the fan segment. The Hyderabad plant will serve as a critical enabler – offering improved supply reliability, enhanced product quality and the agility to respond to evolving regulatory and market dynamics.

The Company operates a well-diversified Water Heaters category, offering electric, solar, and heat pump models. These products are designed to serve both residential and institutional needs and are available across a broad price spectrum—from economical options to high-end premium models. The company is also a leading player in the solar water heater segment. Manufacturing is supported by facilities strategically located in Kala Amb (Himachal Pradesh), Sikkim, and Perundurai (Tamil Nadu), ensuring efficient production and distribution across regions.

During the fiscal year, the Water Heaters category saw moderate demand, primarily due to weather-related factors such as an extended summer and a delayed onset of winter, which contributed to subdued growth. The category also faced heightened price competition, especially within the e-commerce channel.

The Company addresses varied consumer and institutional cooling requirements through an extensive range of Air Coolers, including desert, window-mounted, personal and room variants. These offerings are designed to provide efficient, affordable and reliable cooling solutions across both residential and commercial spaces.

Supported by favourable weather patterns and rising summer temperatures, the category has witnessed strong seasonal tailwinds. The Company continues to invest in product innovation, consistently introducing new models and upgraded designs to meet evolving consumer preferences. With this proactive approach, the Company is well-positioned to leverage the growing demand for air coolers in the Indian market.

The Kitchen Appliances category includes induction cooktop, mixer grinders, gas cooktops, rice cookers and water purifiers along with other small and large appliances like kitchen hoods, breakfast appliances etc. The category continued to experience soft demand trends for the third consecutive year. The weakness is attributed to post-COVID normalisation, prior over-penetration and stress in lower-income segments, affecting both small and large appliances. The slowdown appears structural, industry-wide and not driven by unorganised competition.

To improve supply-side efficiency and cost competitiveness, the Company commissioned a dedicated manufacturing facility in Vapi under its Wholly-owned Subsidiary, V-Guard Consumer Products Ltd. (VCPL). Commercial production began towards the end of FY24, with a focus on mixer grinders and gas stoves. The commercial production of mixer grinders and gas stoves at the plant has reduced reliance on external sourcing. It not only supports V-Guards current requirements but is also designed to meet future demand for mixer grinders, food processors and gas stoves. The Company witnessed some recovery in demand towards second half of FY25 and looks forward to FY26 with several product launches planned and some early traction in e-commerce and general trade.

At present, Water Purifier category is distributed exclusively via e-commerce platforms. Demonstrating swift growth, the category has benefitted from V-Guards commitment to quality and value-driven pricing. As part of its strategic roadmap, the Company is focused on optimising the product range through ongoing feedback from digital channels and consumers. This will lay the foundation for a phased entry into the organised retail space, further strengthening market presence.

Sunflame delivered revenue of H 254.38 crore in FY25 impacted by muted demand and lower orders from Government - run canteen stores. EBIT margins remained under pressure due to higher staffing and promotional spends. The segment is of strategic importance for V-Guards long-term growth and the Company is taking appropriate steps to improve growth and profitability.

Financial and IT systems of Sunflame are now fully integrated with V-Guard. While operational integration is ongoing, the Company has strengthened the brands product development, design and marketing capabilities. Sunflame is working on a long-term growth strategy which includes transitioning to V-Guards direct distribution model and expanding into modern retail where it had limited presence previously.

Channel performance varied during the year for Sunflame. General Trade delivered strong results during the festive period, whereas institutional channels such as the Canteen Stores Department (CSD) and Central Police Canteens (CPC) remained subdued, primarily due to prior overstocking and changes in classification norms. E-commerce and modern trade channels, having undergone system transitions have now stabilised with significant contributions in the second half of FY25.

V-Guard remains confident in Sunflames growth trajectory, aiming for decent growth over the next few years. Margin recovery is expected as integration costs normalise and scale improves.

On the financial front, V-Guard has stayed on track with debt repayment related to the Sunflame acquisition. The loan has been repaid in full in FY25 on the back of strong cash flows and efficient working capital management.

6. Financial Performance

Revenue for the FY25 stood at H 5,577.82 crore, compared to H 4,856.67 crore in the prior year, reflecting a YoY increase of 14.8%. The Electronics, Electricals, and Consumer Durables segments recorded YoY growth of 29.6%, 10.0% and 13.8%, respectively. Sunflame witnessed muted demand and registered a revenue degrowth of 7.2%.

Contribution to revenue from Non-South markets stood at 47.5%, compared to 45.8% in FY24, amounting to H 2,530.47 crore. Contribution from South markets stood at 52.5% vs. 54.2% in FY24, at H 2,792.97 crore. These figures exclude contributions from Sunflame.

In FY25, the Company witnessed strong growth in Electronics and Consumer Durables, driven by demand for AC stabilizers, inverters, batteries and fans. Electricals saw slower growth due to channel destocking and copper price fluctuations. Sunflames revenue was impacted mainly due to slowdown in Kitchen industry and lower orders from Government canteen stores. Despite these challenges, core product demand remains robust, supporting a positive outlook.

Gross margins for the year stood at 36.3% vs. 33.8% in FY24, an expansion of 250 bps YoY, driven by effective cost controls, premiumisation, a favourable product mix and price increases. Increased in-house manufacturing also contributed to the improvement in gross margins. While further immediate margin expansion may be limited, improvements in price competitiveness and sales acceleration are expected.

During the fiscal year, advertising and promotional (A&P) spends were 2.9% of revenue, compared to 2.6% in FY24. A&P spending for the V-Guard brand, along with additional activities under the Sunflame brand post-acquisition contribute to the overall rise in A&P spends.

EBITDA margins for FY25 stood at 9.2%, representing a growth of 40 bps from 8.8% in FY24. PBT for the year stood at H 413.95 crore compared to H 340.32 crore in FY24, registering a growth of 21.6%. PAT for FY25 stood at H 313.72 crore, a growth of 21.8% over H 257.58 crore in FY24.

The Company generated cash flow from operations amounting to H 476.96 crore in FY25, compared to H 392.74 crore in FY24. As of March 31, 2025, net cash balance stood at H 63.83 crore, compared to net debt of

H 203.49 crore as of March 31, 2024. Repayment of the long-term debt related to the Sunflame acquisition, which commenced in April 2024, has now been completed.

In line with its commitment to sustained long-term growth, the Company continues to invest in capacity expansion by setting up new factories and expanding existing facilities. The Company anticipates further enhancement in revenue and margins as these facilities scale up in the coming years.

Note: Financial performance detailed above is on the basis of consolidated financial statements.

7. Outlook

Over the years, V-Guard has evolved into one of Indias most respected consumer brands, built on a foundation of deep industry expertise, advanced infrastructure, strong R&D capabilities and a skilled workforce. Supported by a vast network of distributors and vendors, V-Guard has established a robust nationwide presence, earning significant brand loyalty and a reputation for delivering superior products and services.

Innovation remains central to V-Guards identity. The Company is steadfast in its commitment to innovation and excellence, continuously striving to craft and deliver groundbreaking products that captivate consumers with enriching experience. Aligned with this ethos, V-Guard is dedicated to making strategic investments in emerging opportunities to drive future growth.

The Company continues to invest strategically in emerging growth opportunities, leveraging technology and data analytics to sharpen consumer insights, enhance experience and drive stronger brand engagement. A strong focus on people development, skill enhancement and building an inclusive, safe work environment continues to fuel its sustainable growth journey.

Manufacturing excellence forms a critical pillar of V-Guards operations. Around 65% of its revenues in FY25 were generated through its own state-of-the-art facilities, while remaining came from outsourced production. Over the next three to four years, V-Guard aims to increase the share of in-house manufacturing to 70-75%, enhancing control over quality, costs and supply chain efficiency. The Companys strategically located plants also support its diversification efforts and strengthen its expansion into Non-South markets.

Financially, V-Guard stands on a solid foundation, supported by robust cash flows and high credit ratings. New manufacturing units launched in Hyderabad (Inverter Batteries) and Vapi (Kitchen Appliances), along with operational enhancements at Sunflame Enterprises Pvt. Ltd., position the Company for accelerated scaling and improved margin performance. VCPL, Wholly-owned Subsidiary of the Company, has started work towards setting up a facility near Hyderabad to produce TPW and ceiling fans with an investment of ~ H 100 crore. The first phase of the facility, is expected to begin operations within 18 months. The Company is further investing ~ H 50 crore for increasing the capacity of Hyderabad Battery plant.

As a well-recognised brand with a wide portfolio of products, the Company is well entrenched in the domestic market on a pan-India basis and believe it is poised to capitalise on the strong growth potential of the Indian market in the years ahead.

Sunflame is expected to bounce back, contingent on external demand factors, with a broader long-term vision for sustained expansion within the kitchen appliances category. V-Guards strategic roadmap focuses on strengthening Consumer Durables by scaling operations and improving margins, expanding its presence in the high-potential Electricals segment, particularly in Switches and Switchgears, and enhancing competitiveness in the Inverter-Battery category through manufacturing efficiencies.

Growth momentum is expected to be led by Consumer Durables, Switches and Switchgears, and Inverter-Battery, while other categories are expected to grow broadly in line or slightly better than overall market.

With an expansive retail network of more than 1 lakh dealer and retailer touchpoints as of FY25, and plans to add 3,000-4,000 new retailers annually, V-Guard continues to prioritise investments in brand-building, advertising and promotions and workforce expansion, particularly in emerging categories.

Guided by a clear vision to become Indias most trusted and admired consumer brand, V-Guard remains firmly committed to delivering exceptional consumer experiences, driving sustainable, profitable growth and maximising long-term value for its shareholders.

8. Strengths and Opportunities

Strengths

High Brand Recall: The Company has invested significantly in building its brand equity over the past decade, which has led to high brand recall and enabled entry into new product categories.

Growing Focus on Domestic Manufacturing: The Company has placed considerable emphasis on enhancing its in-house manufacturing capabilities and has reduced reliance on imports. This has enabled the Company to control cost, improve supply chain resilience and enhance responsiveness to local market needs.

Commitment to Innovation and Quality: Heightened emphasis on R&D, development of new product and superior quality enables the Company to enhance its offerings and garner the trust and loyalty of its consumer base.

Extensive Distribution Network Reach: A widespread network of more than 1 Lakh retail touchpoints provide the Company an extensive market reach across India.

Catering to a Large Consumer Base: The diversified product portfolio within the fast-growing consumer electricals, electronics and durables space targets the mass consumption market in India, offering substantial growth potential.

Proven Ability for Competitive and Profitable Growth: A strong track record of execution indicates the Companys ability to capitalise on emerging opportunities and deliver consistent financial performance.

Experienced Leadership Navigating Complexities:

A well-equipped management team brings valuable expertise and understanding to navigate the dynamic Indian business environment.

Customer-Centric Approach Driving Loyalty: The strong focus of the Company on after-sales service and its meticulous approach to understand the needs of the consumers enable it to garner the trust and loyalty of the consumers.

Opportunities

Strong Macro and Demographic Drivers: The industry will continue to see a strong uptrend in the medium- to long-term driven by macroeconomic and industry factors like increasing disposable incomes, increased ease of availability of finance, low product penetration levels, growing middle class, premiumization in metros and urban towns, and increasing distribution reach by companies in tier II and tier III cities as well. In addition, the Governments push for housing for all, increasing availability of electricity and infrastructure development augur well for long term growth prospects of the sector.

Growing Demand for Energy-Efficient Products:

Heightened environmental awareness and rising electricity costs are driving the growing inclination of consumers towards energy-efficient appliances and electrical products. The Company can capitalise on this demand by widening its energy-efficient products portfolio across categories, such as BLDC fans, electric water heaters, water pumps, etc. Incorporation of long term cost saving and environmental benefits in its products can help the Company to tap into this expanding segment.

Significant Growth Potential in Non-South Markets: By strategically investing in the distribution network, tailoring market campaigns to local preferences and potentially introducing region-wise products, the Company can increase its market share and revenue in the under-represented regions. Further, this diversification will reduce the Companys dependence on any specific market.

Shift from Unorganized to Organized: The Company is present in key product categories having significant market sizes. Increasing formalization of the market presents an opportunity for organized players to benefit - especially market leaders, with established brands and entrenched manufacturing and distribution capabilities.

E-Commerce: The Company has steadily built up its presence in e-commerce and continues to see healthy growth in this channel.

Replacement Demand: Shortening renovation cycles across segments due to rising disposable incomes, changing preferences of middle class and companies focus of technology and innovation.

9. Enterprise Risk Management

A strong governance structure has been put in place where the Risk & ESG Committee of the Board oversees the adequacy and effectiveness of the Risk Management Framework. It incorporates leading risk management standards and practices to identify, assess, prioritize, manage and report risks.

All identified risks are evaluated based on their likelihood of occurrence and potential impact on the Companys operations and objectives. The key risks, along with the corresponding mitigation strategies, are outlined below:

Key risks	Risk Statement	Mitigation Plan
	The channel landscape is fast changing with multiple trade formats and inadequate presence in certain emerging channels; hence the need arises to focus on Go-To-Market, customer management & trade terms capabilities.	• Channel-centric focused organizational structure and agile operating model.
Emerging channels		• Robust insights mechanism and digital marketing capabilities.
		• Established SCM, Service & Sell-out systems.
		• Developed D2C, Quick Commerce & other Digital
		Operating Models.
		• Key account management and retail marketing capabilities.
		• Differentiated GTM Model (sell-out) & exclusive products.
	Advent of digitization may bring about very significant changes to business model, including disruption	• Investing in capabilities required to scale up e-commerce operations.
Impact of digitization	in sales and distribution, fundamental process changes and shift in consumer behavior and products.	• Smart products roadmap to drive digital product plans.
		• Processes around digital content and digital customer acquisition.
		• Digitally driven Sell-out system and next-generation supply chain capabilities.
		• Enterprise analytics for better visibility and collaboration.
	Cost of doing business is rising and growth is impacted due to traditional electrical players expanding focus to adjacent categories, slew of e-Com players leveraging vendor ecosystem, consolidation of companies and MNCs shifting focus on Indian FMCE market.	• Adoption of digital Product Life Cycle Management for faster time to market.
		• Product value chain to enhance product differentiation.
Hypercompetition in marketplace		• Consumer-centric long-term NPD pipeline.
		• Building sell-out management capability.
	Commodity price volatility, delayed pricing actions, dependency on trading operations can impact margins.	• Velocity of pass-through and timely pricing actions.
		• Monitoring of commodity price movements and market price tracking mechanism.
Margin recovery		• In-house manufacturing of established products through organic and inorganic routes.
		• Value engineering initiatives for cost reductions.
		• Premiumization of product portfolio.
	Due to the increased threat of cyber security incidents globally, IT downtime and data loss can adversely impact business operations.	• Robust Information Security Management Systems corresponding to global standards and industry benchmarks.
Information security		• Disaster Recovery Plan for critical applications.
		• Incident management response systems.
		• Building awareness among users.
		• Cyber threats are mitigated by deploying advanced systems, tools, and processes.
	Impact on business continuity and reputation due to Environmental & Social incidents and noncompliance of regulations.	• Transitioning to low-carbon operations to address climate-related risk by: Integrating renewable energy, water conservation, circular waste management practices, and investing in responsible products.
Environment, Social and Governance		• Well-established Environment, Health, and Safety compliance framework.
		• Human Rights assessments for employees and value chain partners.
		• Empowering communities through CSR initiatives.
		• Multi-tier governance mechanism to consider the aspects beyond compliance.
		• Disclosures as per standards.
	External and internal factors can lead to supply disruption, impacting sales.	• Reducing dependency on imports through in-house manufacturing and developing domestic alternatives.
Supply Security		• With the help of R&D, continuously developing alternate make, designs and models.
		• Disaster management plan for own manufacturing plants.
	Non-availability of people with appropriate skills for evolving business requirements and growth.	• Locational flexibility is supported by collaborative platforms and technology to attract talent.
Inadequate Talent Pipeline		• Upskilling and leadership development programs for employees.
		• Focused employee value propositions.

10. Human Resources

Over the last year, HR has taken various initiatives for employee benefit and retention. A new Human Resource Management System (HRMS) platform was introduced to digitise the processes, improve data management and enhance analytics-driven decision making. During the year, your Company continued with succession planning & risk mitigation programme for critical senior leadership positions and continues with strategic initiatives for career development for high potential managers and creation of a talent pool.

Continuing with retaining and attracting talent pool your Company continued with its ESOP plan and granted options as per ESOP 2013 Scheme to 47 employees during the year. Overall ~80 employees are covered under ESOP plan.

Over 4,700 employees engaged with more than 470 curated courses. The Company also conducted various management development programmes to groom the employees. The relationship of your Company with employees has been cordial during the year. The Company also won AmbitionBox Employee Choice Awards for Best Place to work for three years in a row in Consumer Electronics Industry (Mid-size category).

As on March 31, 2025, the total number of employees of the Company is 3,133 against 3,006 on March 31, 2024.

11. Audit & Internal Control Systems

The Company has internal control systems commensurate with the nature of its business, size and complexities which is integrated with Company policies, defined Standard Operating Procedures across processes and approved Delegation of Authority Matrix. The key objective of the internal control systems is to manage business risks, enhance shareholder value and safeguarding of the assets.

Cross functional internal audits are conducted at all locations to ensure that high standards of Internal Controls are maintained. It provides reasonable assurance on the internal control environment and against non-occurrence of material misstatement or loss. Every quarter, Audit Committee reviews the adequacy and effectiveness of internal control system and monitors the implementation of audit recommendations.

The Company has a robust Internal Financial Controls monitoring framework. The Company continuously monitors process changes and updates the Risk and Control Matrices (RCMs) along with identification of process automation opportunities and enhanced management monitoring mechanisms to strengthen the control environment. Key controls across processes were evaluated during the year to provide assurance regarding compliance with the existing policies and significant operating procedures, and no significant weaknesses/ deviations were noted in effectiveness of the controls. Further, the Statutory Auditors of the Company also conducted audit of the Internal Financial Controls Over Financial Reporting of the Company as on March 31, 2025, and issued their report which forms part of the Independent Auditors report.