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business | IST

V-Guard says weak demand will hurt FY19 revenue growth

V-Guard Industries expects to clock a revenue growth of 12 percent to 13 percent in the fiscal year 2018-19, down from th previous guidance of 15 percent due to weak demand in India, said managing director Mithun Chittilappilly.

V-Guard Industries expects to clock a revenue growth of 12 percent to 13 percent in the fiscal year 2018-19, down from th previous guidance of 15 percent due to weak demand in India, said managing director Mithun Chittilappilly.
“We have seen pick-up in demand in some pockets, for example Kerala is bouncing back after a very rough first half; we have very unfortunate events there which affected the Q2 demand but we are seeing some pick in demand there,” he added.
Talking about liquidity crunch, he said, “The liquidity crunch is very much real. For the last 18 months or so we are feeling that a lot of our retailers, distributers are not able to get the kind of financing that they want to grow the business.”
On pricing front, Chittilappilly said, “During the month of February we had taken price increase of about 2 percent depending upon the category.” He further said that we have taken price hikes on voltage stabiliser, fans and pumping products.
Key highlights:
- Seeing pick-up in demand over the past 2-3 weeks
- Might end FY19 with 12-13% revenue growth vs 15% revenue growth guidance
- Debtor days have improved on a sequential basis
- Gross margin dipped 200 bps yoy due to delay in price hikes
- Margins to remain below 10% in FY19
- Aim To Achieve 50:50 Rev Contribution from South & Non-south
- Market Share in Fans at 3.5-4%
- Higher Indirect Cost in Non-south Region Leads To 400-500 bps Margin Gap
- Expect 15% Revenue Growth in FY20