The shares of this smallcap company surged around 6 percent in Tuesday’s trading session after Vijay Kedia through Kedia Securities Private Ltd bought a stake in the company. In six months the stock has delivered more than a 20 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 8,359 crores, the shares of VIP Industries Ltd started Tuesday’s trading session on a higher note at Rs. 582 compared to its previous close of Rs. 556.85. During the trading session, the shares hit a high of Rs. 589.75, gaining around 6 percent and are currently trading at Rs. 578 apiece.
What Happened:
As per the NSE Bulk Deal data, one of the prominent Investors, Mr Vijay Kedia via Kedia Securities Private Limited bought around 7.25 lakh shares i.e., equivalent to 0.51 percent of paid-up equity in the luggage manufacturing company at an average price of Rs. 545.97.
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Financials:
Looking at the company’s financial statements, the revenue increased by 23 percent from Rs. 516.32 crores during the March quarter to Rs. 638.89 crores in the June quarter. On the other hand, the net profits showcased a transition from a net loss of Rs. 23.88 crores to a net profit of Rs. 4.04 crores during the same time period.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 8 percent and a return on capital employed (RoCE) of 10.83 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was 2.41 percent.
Management Guidance:
The management has set a target for double-digit revenue growth and 15 percent EBITDA margins for FY25, with expectations for profitability to improve in the latter half of the fiscal year.
Moreover, the company anticipates a recovery in sales starting from the third quarter (Q3) of FY25, particularly due to a resurgence in wedding season demand.
Additionally, the company projects gross margins to rebound to approximately 50 percent by the end of FY25, aiming for 55 percent by FY26.
Furthermore, VIP Industries gained a 2 percent market share in Q1 FY25 and anticipates another 2 percent gain in the current quarter, projecting an increase from 36 percent to 40 percent by December 2024.
Company Profile:
Established in 1968,VIP Industries Ltd is India’s largest luggage manufacturer and the second-largest globally, specializing in a wide range of travel products including suitcases, backpacks, and handbags.
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Written By Vaibhav Patil
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