VIP Industries hits two-month high; stock climbs 30% in one month

The stock was up 5.5% at Rs 514 on Tuesday, extending its 6% rally on BSE in the previous session, on the expectation of strong demand outlook.

Shares of VIP Industries hit a two-month high of Rs 514 apiece, up 5.5% on Tuesday, extending its 6% rally on  BSE in the previous session, on the expectation of strong demand outlook.

The stock was trading at its highest level since September 29. It has outperformed the market by surging 30% in the last one month, as compared to a 6% rise in the S&P BSE Sensex.

VIP Industries had reported a strong 30% year-on-year (YoY) growth in its consolidated revenue at Rs 4.02 billion, aided by healthy 35% YoY domestic volume growth. The consolidated net profit grew 35% at Rs 492 million on YoY basis.

Ebitda (earnings before interest, tax, depreciation and amortization) margins expanded 87 basis points (bps) to 12.7% on strong sales growth partly offset by higher other expenses.

The company’s recent initiatives to capture the shift in consumer preference from the unorganized to organized segment and increasing focus on institutional sales will augur well for its brands in the long term, according to analysts at Equirus Securities.

“VIP is likely to record strong volume growth in the luggage space, and growth in brands like VIP, Caprese and SKYBAGS would help safeguard gross margins to some extent,” the brokerage firm said in a result update with 12-month target price of Rs 558, given the strong volume growth momentum backed by recent correction in the stock price.

VIP Industries had fallen 38% from its all-time high closing level of Rs 633 on August 27, to Rs 393 level on October 25. In comparison, the S&P BSE Sensex was down 13% during the same period.

At 09:48 am, the stock was trading 5% higher at Rs 512 on the BSE, against 0.09% decline in the benchmark index. A combined 568,000 equity shares changed hands on the counter on the BSE and NSE so far.