V-Guard shares gain 2.4% on Q1 results

Shares of electrical equipment maker V-Guard Industries gained 2.4% on Thursday after analysts were upbeat about the company's April-June earnings.

The company's net profit gained 67% year-on-year to Rs 20.6 crore, while net sales rose 37% to Rs 329 crore. Analysts said the results were above estimates.

"V-Guard results have been much better than estimates and with increased focus on improving working capital; we believe the growth to be qualitative too," said IDBI Capital analysts in a note to clients.

"Increased power outage aided in higher revenues from DUPS. Revenue growth was led by robust performance across all product categories except solar water heaters," the analysts said.

The company trades at EV/EBITDA of 8.9 times 2013-14 estimates. "We increase our target multiple to 13xFY14 (earlier 11x) due to improvement of margin and working capital. However, downgrade the stock from BUY to HOLD with a revised price target of Rs406, due to recent sharp run-up in stock price," the analysts added.