VIP Industries Ltd. share price target

~ 7.7 % in Q3FY17 despite demonetization, the absence of the Haj institutional tender this fiscal that it won in Q2FY16 partly contributed to the flat yoy growth in 9MFY17. But this absence of any low margin institutional orders together with ~ 182 basis points fall in...

VIP Industries (VIP) reported in-line numbers for Q3FY17 with a revenue and PAT growth of 5.5% & 43.3% YoY. Aided by improved negotiations with suppliers, stable INR and weak Chinese Yuan (vs INR), gross margins expanded by 365bps YoY, which was encouraging.

VIP Industries manufactures moulded luggage (from high-density polyethylene), soft luggage (from nylon, polyester,jupolene, printed polyester) and ABS luggage (from acrylonitrile butadiene styrene plastic) including briefcases, suitcases, handbags, carry bags and vanity cases. The installed capacity for flexible luggage is 3,60,000 pa.

VIP has been able to post an impressive growth at ~ 15.0% yoy to ~ 2.9 bn in its top-line and ~ 33.0% yoy to ~ 113 mn in its bottom-line on the back of growing popularity of its Skybags and Caprese brands. Focused ad campaigns with brand...

Caprese, Skybags and Carlton to boost revenues: The company derives 20%-25% of revenues from Skybags which are growing at 40% YoY. Carlton and Caprese contribute Rs.500 Mn each to the revenues of the company, which are growing at 50% YoY. The company is spending huge amount (5% to 7% of revenues) on advertising which can translate into revenues in the coming years.