VIP Industries’ most recent investor presentation offered a positive corporate forecast. With a day high of ₹534 per share, the shares of VIP Industries are moving higher, up 13.3% intraday. Shares of VIP Industries surged by almost 15% subsequent to the release of the company’s FY25 business update guidance. An extensive overview of India’s travel and tourist sector and its effects on the luggage business was given in the investor presentation.
These are the investor presentation’s five key lessons to remember:
Positive outlook for FY25
The primary driver of the recent surge in shares of VIP Industries is their positive outlook for FY25. Beginning in Q4FY24, the company anticipates double-digit sales growth. Gains in market share are anticipated from a more varied product portfolio and expanded regional reach. 15% EBITDA margins are the target the corporation wants to hit by the end of FY25.The corporation also wants to optimize inventory levels while lowering debt and interest expenses.
Strong anticipation for industry growth
Based on internal estimates from the company, the Indian baggage industry is valued at approximately ₹20,000 crore, with branded players holding a 54% market share. Since the travel and tourist sector offers substantial economic opportunities to luggage industry enterprises, there is a strong correlation between the baggage industry in India and this sector. The travel and tourism sector has experienced exponential growth in recent years due to the increasing willingness of Indians to travel domestically and internationally. The baggage business, which is predicted to rise by 12% in FY25, has benefited greatly from this boom.
There is a premiumization trend in the Indian luggage market
As the premiumization trend engulfs the luggage business, it is predicted that by CY2027, the share of branded players would reach 60%. Customers are gravitating for branded and organized players as discretionary spending rises. Furthermore, the increased frequency of travel has made luggage into a lifestyle item.
A varied range of products
The company’s diverse product offering allows it to serve all customer groups and cohorts. As of Q3FY24, the upright category accounted for 76% of the company’s revenue, with backpacks (12%), duffel bags (8%), and women’s handbags (4%) following closely behind. Consequently, VIP Industries holds a considerable portion of the market in the category of organized luggage.
Robust geographic reach
With a growth in presence from 820 towns in FY20 to 1361 towns in 9MFY24, the company was able to successfully reach a broad range of clients nationwide. With these 1361 towns and 13,000 points of sale, the company serves a significant portion of Indian travelers nationwide. Additionally, the e-commerce platform’s company helps to spread its reach throughout the nation’s tier 2 and tier 3 municipalities.
