V-Guard Industries slips over 13% as net profit plunges 47% in Q3

NEW DELHI: V-Guard Industries Ltd slipped as much as 13.3 percent in trade on Monday, after the electrical goods maker reported 47.4% drop in December quarter net profit at Rs 9.23 crore due to poor sales, write-down on inventories and a 50 per cent hike in advertising spends.

At 09:50 a.m.; V-Guard Industries Ltd was trading 6.8 percent lower at Rs 1062. It hit a low of Rs 988 and a high of Rs 1094 in trade today.

The company's net profit in the same quarter a year ago stood at Rs 17.53 crore.

The company's Managing Director Mithun K Chittilappilly told PTI that during the reporting quarter, the company has written down around Rs 6.5 crore on its copper inventories, whose prices fell over 10 per cent during the period.

Another reason for the fall in bottomline is the almost 50 per cent increase in advertising spends to promote a new water heater the company launched.

Advertising spends during the quarter rose to around Rs 13 crore, up from around Rs 7 crore, Chittilappilly said, adding that sales also did not happen as projected.

But, the management expressed confidence that the company would be able to meet its full fiscal sales target of Rs 1,800 crore turnover. For the third quarter ended December 31, 2014, the company has clocked a cumulative turnover of Rs 1,280 crore.