VIP Industries Ltd
VIP Industries Ltd
VIP Industries Ltd - Company Overview
Incorporated in the year 1982, VIP Industries Ltd is world’s second largest and Asia’s largest luggage maker based in Mumbai, Maharashtra, India. VIP Industries Ltd is a market leader in the branded luggage segment with about 55 per cent market share in the organized market. It has acquired UK luggage brand Carlton in 2004. It provides travel products, hard and soft-sided luggage, bags, backpacks, duffels, shoulder bags, waist pouches, sling bags, duffel trolleys, vanity cases, office bags and satchels, suitcases, and briefcases. VIP Industries Limited company offers its products primarily under the VIP, Carlton, Footloose, Alfa, Aristocrat, Skybags, and Buddy brands. It also manufactures moulded furniture under the Moderna brand. It currently has over 200 company-managed stores and another 200 franchisees. It also works with over 2,000 multi-brand retailers to sell its products. Its sales are equally split across all four regions in India. The top 12 metros remain the most important markets for the company. However, its direct dealer network reaches top 400 towns and cities of India and it is planning to expand sales in smaller towns too. The company is planning to develop new luggage ranges with advanced design and superior aesthetics.
VIP Industries Ltd has operations across the globe in five continents. It has offices in the USA, South Asia, Middle East, Africa and Europe. The company has entered into technical collaboration with Delsey S A France for manufacturing some of their premium range suitcases & briefcases. Skybags is the fastest growing brand, growing at 70% annually for the last three years. It is expected to continue growing by 50% per year, driven by growth in new categories such as backpacks and weekend bags. To reduce the dependency on outsourcing from China, VIP has set up a wholly owned subsidiary in Bangladesh. This company started commercial operations from Q4FY14. Bangladesh facility has turned profitable from Q4FY15. It is working at utilization of ~70% which the management intends to increase to 85% and also expand its capacity over the next 3-5 years. This subsidiary contributes nearly 10% of the total revenue.
|
CMP (as on 19/12/2016) |
118.00 |
|
52 Week H/L |
156.90/85.00 |
|
Market Cap (Cr) |
1667.54 |
|
Equity Capital (Rs cr) |
28.26 |
|
Face Value (Rs) |
2 |
|
|
|
|
Shareholding Pattern (%) |
|
|
Promoters |
52.50 |
|
Non Institutions |
42.50 |
|
Grand Total |
100 |
Investment Rationales:
-
Growth potential of the travel industry
-
Increase in per-capita income
-
Brand building and promotion activities to pay dividends
-
Urbanization a game changer
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Growth potential of online sales
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Favorable market positioning
VIP Industries Ltd - Outlook
VIP Industries Ltd is the largest player in the domestic bag and luggage market with its high-quality products and wide market reach in both India and abroad. With the favorable demographic pattern, improvement in dynamics of the travel industry along available market opportunities, we expect VIP to perform considerably well in the medium term and long term.
Financial profile
|
Particulars (Rs. in Crs) |
FY12 |
FY13 |
FY14 |
FY15 |
FY16 |
|
Sales Turnover |
874.43 |
854.1 |
987.71 |
1063.53 |
1234.25 |
|
Operating Profit |
122.16 |
72.49 |
100.76 |
86.07 |
112.52 |
|
Net Profit |
67.61 |
31.52 |
57.64 |
46.59 |
66.46 |
|
EPS (Rs) |
4.78 |
2.23 |
4.08 |
3.30 |
4.70 |
|
PE(X) |
24.66 |
52.90 |
28.93 |
35.79 |
25.09 |
Company expense breakup(FY16)
Product revenue breakup(FY16)
VIP Industries Ltd - Profit and Loss Account
|
|
FY12 |
FY13 |
FY14 |
FY15 |
FY16 |
|
INCOME : |
|
|
|
|
|
|
Sales Turnover |
874.43 |
854.1 |
987.71 |
1063.53 |
1234.25 |
|
Excise Duty |
14.17 |
16.44 |
14.89 |
15.84 |
17.8 |
|
Net Sales |
860.26 |
837.66 |
972.82 |
1047.69 |
1216.45 |
|
Other Income |
1.48 |
1.84 |
18.31 |
8.83 |
2.3 |
|
Stock Adjustments |
27.38 |
-2.37 |
29.91 |
47.6 |
55.03 |
|
Total Income |
889.12 |
837.13 |
1021.04 |
1104.12 |
1273.78 |
|
EXPENDITURE : |
|
|
|
|
|
|
Raw Materials |
441.47 |
442.92 |
562.23 |
620.34 |
717.75 |
|
Power & Fuel Cost |
12.17 |
13.43 |
13.07 |
13.45 |
14.27 |
|
Employee Cost |
81.65 |
84.74 |
93.32 |
111.71 |
125.86 |
|
Other Manufacturing Expenses |
6.85 |
6.81 |
33.54 |
30.04 |
35 |
|
Selling and Administration Expenses |
212.7 |
202.56 |
198.61 |
218.93 |
239.16 |
|
Miscellaneous Expenses |
12.12 |
14.18 |
19.51 |
23.58 |
29.22 |
|
Total Expenditure |
766.96 |
764.64 |
920.28 |
1018.05 |
1161.26 |
|
Operating Profit |
122.16 |
72.49 |
100.76 |
86.07 |
112.52 |
|
Interest |
8.99 |
7.33 |
3.96 |
3.06 |
3.23 |
|
Gross Profit |
113.17 |
65.16 |
96.8 |
83.01 |
109.29 |