The shares of luggage-maker VIP Industries Limited which owns famous brands such as Skybags, Carlton, and Caprese have climbed almost 20% in the previous 10 trading sessions. As of 12:30 IST, the stock was trading at ₹ 619.45 per share, up 19.95% from the price of ₹ 516.56 it registered at 10 AM on 13 June, the previous Monday morning.
Ace-billionaire investor Rakesh Jhunjhunwala has been continuously reducing his stake in the company since last year. The travel and tour industry took a strong hit with the onset of the Covid-19 pandemic. Thereby affecting the luggage make directly as the demand for its travel and business bags declined sharply.
Net sales of the company grew by 46.5% to ₹ 355.90 crores for the March quarter ended 2022 from ₹ 243 reported for the same period last year. Supported by increased revenue, the company could report a consolidated net profit of ₹ 12.39 crore for the quarter. In the previous financial year, it registered a net loss of ₹ 2.78 crores for the fourth quarter.
Employee benefit expenses surged 44.63% while the cost of goods consumed climbed 96.48% during the quarter signalling demand revival.
For the complete fiscal year, the company recorded a 168.7% growth in net profit to ₹ 66.93 crores backed by a 108.5% recovery in net sales to ₹ 1,289.51 crores over the 2021 financial year.
ICICI Direct has given a one-year price target of ₹ 770 for the stock, signalling an upside of 24%. The brokerage expects a net-debt-free balance sheet to assist the company in effectively dealing with the tough business environment. The estimated FY23 demand is anticipated to touch pre-Covid levels.
The company increased the share of in-house manufacturing from India and Bangladesh in the aftermath of the coronavirus-induced pandemic. Earlier, the company was majorly dependent on China for production. This will result in improved margins in the future.
Written by Vikalp Mishra
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