Motilal Oswal bullish on luggage sector; initiates 'Buy' on VIP Ind, Safari

Motilal Oswal has initiated coverage on VIP Industries and Safari Industries with 'Buy' ratings; check target price and key reasons

Motilal Oswal is bullish on the Indian luggage industry, expecting a rebound after a sharp contraction during the pandemic. The brokerage projects the Indian luggage industry to reach ₹26,700 crore by CY28, registering a compound annual growth rate (CAGR) of 12 per cent over CY23-28. In CY20, the industry contracted sharply to ₹6,000 crore due to the pandemic.

 

Branded players, which accounted for 52 per cent of the market in CY23, are expected to outpace overall industry growth, supported by rising disposable incomes, rapid urbanisation, and a resurgence in both domestic and international travel.

 

On this backdrop, Motilal Oswal has initiated coverage on VIP Industries and Safari Industries with ‘Buy’ ratings, setting target prices at ₹530 and ₹2,700, respectively.

 

Luggage Sector Stock performance

In the year-to-date (Y-T-D) period, VIP Industries and Safari Industries shares have lost 6 per cent and 14 per cent, respectively. In comparison, Nifty50 has gained nearly 6 per cent. 

Shift from utility to lifestyle to spur volume and value growth 

India’s luggage market is shifting from a utility product to a lifestyle choice, according to Motilal Oswal. The move from unbranded to branded products, aided by premiumisation, product innovation, and e-commerce, is set to boost volume and value growth in the organised segment.

 

Brands like VIP, Safari, and Samsonite are gaining share as consumers opt for design, quality, and trusted labels. The premium category, driven by Millennials and Gen Z, is the fastest growing, with smart luggage innovations adding aspirational value. Valued at ₹15,500 crore in CY23, the industry is projected to expand at 12 per cent CAGR through CY28, propelled by rising incomes, stronger travel demand, and penetration into Tier-II/III cities.

Branded products to gain market share

Industry estimates peg the Indian luggage market at ₹17,000 crore in CY24, with branded products gaining share and presenting significant conversion potential. VIP, Samsonite, and Safari together control about 33 per cent of the market. The mass segment (priced below ₹4,000) accounts for 60 per cent (₹10,200 crore), driven by brands such as Safari (16 per cent), Aristocrat, and Kamiliant (30 per cent together), which drive  first-time branded adoption through aggressive pricing, bundles, and widespread distribution. 

 

In the mid-priced segment (30 per cent of the market), VIP (21 per cent via VIP and Skybags) and American Tourister (17 per cent) leverage strong brand recall and omnichannel presence to target upwardly mobile, value-conscious consumers, focusing on distinctive designs, seasonal launches, and curated retail formats to reinforce aspiration.

 

In the premium segment (about 10 per cent of the market), legacy brands, such as Samsonite (20 per cent share) and Carlton (8 per cent), maintain leadership through their established reputation in the business and international travel segments.

Surge in tours and travels

India’s travel landscape has rebounded sharply post-pandemic, with domestic tourist visits rising to 3.06 billion in CY24 from 2.51 billion in CY23, surpassing pre-Covid levels, per the Ministry of Tourism. Rising leisure travel, weddings, MICE events, and short getaways are fuelling recurring luggage demand, especially among younger urban consumers.

Weddings—a key booster 

Luggage sales are also benefiting from wedding-driven demand—whether as gifts, trousseau essentials, or for destination events. Over 4.8 million weddings took place during the Nov–Dec’24 peak season alone. For FY26, auspicious wedding dates are expected to rise to 67 (up 20 per cent Y-o-Y), ensuring cyclical but predictable demand.

 

Destination weddings, both domestic and international, are growing at an estimated 8–10 per cent CAGR, boosting premium luggage purchases as larger family groups travel together. This segment alone adds a 10–15 per cent uplift to premium luggage sales annually.

Student migration and corporate mobility fuel luggage growth

Rising student migration and renewed corporate travel are emerging as key drivers of India’s luggage market. The return of academic activities, hostel stays, educational trips, and university admissions is boosting steady demand for backpacks, duffel bags, and travel gear.