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GST implementation has impacted V-Guard Industries’ performance in the first quarter of the current fiscal, with flat revenues and decline in margins.
The profit after tax for the quarter was ₹23.25 crore, down 46 per cent compared to ₹43.03 crore for corresponding period of the last financial year. The net revenue from operations was ₹569.07 crore, a growth of 1.5 per cent, compared to ₹560.89 crore in the corresponding period of the last fiscal.
According to the company, the GST led to temporary de-stocking by trade and resulted in drop in volumes and margins.
The surge in raw material prices and delayed price increase in the market added to the woes. GST related one-off expenses and start-up costs of the Sikkim factory also negatively impacted the bottomline.
Mithun K Chittilappilly, Managing Director, said, “the first quarter has seen significant disruptions on account of the transition to the GST regime. July sales have been encouraging and we hope to recoup sales in the next couple of quarters as we expect trade to start re-stocking once initial GST hiccups are out of the way. Although GST creates short term pain, it will lead to significant long term gains as V-Guard is positioned to take advantage as market shifts from unorganised business to organised business”.
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