Buy VIP Industries: Equity99

Sumit Bilgaiyan

India’s organized luggage industry is set to grow at a healthy pace, led by rising disposable income, increasing women workforce, growing interest of people in tourism and rising preference for branded products with growing acceptance of handbags as a lifestyle product.

GST implementation would result in meaningful shift in market share from unorganized to organized players in the coming years. This would help VIP Industries further improve its market share and maintain its dominant

position in organised Indian luggage industry.

Expanding reach, increasing focus on fast growing new age brands like Carlton, Caprese, Skybags and constant focus on innovation and brand building should enable the company to further strengthen its brand equity and drive its volume growth.

Q4FY18 numbers are very much on this line as we have witnessed a healthy growth in volumes. Margin expansion would continue at a steady pace as premium brands’ share will improve in overall all mix.

Improved return ratios and steady and rich dividend payouts should provide valuation comfort. Currently, we have a buy rating on stock.

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