Motilal Oswal sees 12% CAGR in luggage sector; VIP, Safari Ind top picks

The Indian luggage industry is entering a high-growth phase, poised to reach ₹267 billion by CY28, expanding at a CAGR of 12 per cent from CY23. After pandemic-led disruptions that shrank the sector to ₹60 billion in CY20, the rebound has been sharp, with the market tripling to ₹155 billion by CY23 and further rising to ₹170 billion in CY24. Branded players, which currently command 52 per cent of the market, are expected to outpace industry growth as consumers increasingly shift from unbranded to branded products.

 

The demand momentum is underpinned by multiple structural drivers. Rising disposable incomes, rapid urbanisation, and higher travel frequency—both domestic and international—are shortening replacement cycles and boosting premiumisation. Weddings remain a powerful consumption trigger, with destination weddings alone estimated to lift premium luggage sales by 10–15 per cent annually. Similarly, student migration, corporate mobility, and the resurgence of MICE travel are supporting recurring demand across categories ranging from backpacks and duffels to compact trolleys.

 

 

Market segmentation reveals a distinct hierarchy. The mass category, priced below ₹4,000, accounts for about 60 per cent of the market, led by Safari, Aristocrat, and Kamiliant. The mid-priced segment (~30 per cent) is dominated by VIP and American Tourister, which leverage strong recall and omnichannel reach to cater to aspirational buyers. The premium segment, though only 10 per cent by value, is expanding rapidly as Samsonite, Carlton, and digital-first entrants such as Mokobara and Uppercase position luggage as a lifestyle accessory, blending status and style with function.

 

Emerging trends are reshaping consumer engagement. Luggage is increasingly viewed as a status symbol, with social media and fashion influencing purchase decisions, especially among millennials and Gen Z. The rise of smart luggage—equipped with GPS, USB charging, and app connectivity—is set to grow at 20 per cent CAGR through 2030, further elevating the category’s aspirational quotient.

 

Despite strong tailwinds, risks remain. Price competition in the mass segment, heavy reliance on imports by unorganised players, and potential shocks to travel demand from macro or geopolitical events could impact margins.

 

Nonetheless, the medium-term opportunity is compelling. With India’s domestic tourism surpassing 3 billion trips in CY24, expanding aviation infrastructure, and nearly 60 per cent of households projected to fall in the middle- or high-income bracket by FY31, the industry is structurally positioned for sustained growth. As luggage transitions from utility to lifestyle, established players and nimble D2C challengers alike are set to benefit from a deeper and more brand-conscious consumer base.

VIP Industries – TP: ₹530  

VIP Industries, a leading player in India’s ₹170 billion luggage market, has outpaced industry growth, delivering a revenue CAGR of 19 per cent over FY22–25. With a scalable, profitable digital engine complementing its offline leadership, VIP is well-placed to capture the shift in consumer buying behavior and lock in long-term market share gains. We expect VIP to continue gaining share and deliver industry-beating growth, by leveraging the integrated strategy of premiumisation, digital scale and margin accretive supply chain, which underpins our confidence. We model a revenue/Ebitda CAGR of 10 per cent/73 per cent over FY25-28E ,driven by healthy volume growth, sharp margin improvement, premiumisation, channel optimisation, and manufacturing efficiencies and provide a buy rating on the stock.

Safari Industries – TP: ₹2,700

A leading player in the mass-luggage industry that outpaced industry growth with ~30 per cent market share (b/w the top players), SI has reported a revenue CAGR of 36 per cent over FY22-25. With its focus on building Safari Select/Urban Jungle (premium positioning) and enhanced capacity at Jaipur, the company is expected to deliver a revenue/Ebitda/APAT CAGR of 16 per cent/25 per cent/27 per cent over FY25- FY28E, driven by healthy volume growth and an improving margin profile.  (Disclaimer: This article is by Motilal Oswal Financial Services Research desk. Views expressed are their own.)