VIP Industries Q4 Review - Gross Margin Pressure To Sustain Until Demand Revives: Prabhudas Lilladher

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Prabhudas Lilladher Report

While our FY22 estimates for VIP Industries Ltd. have undergone a massive cut as second wave has derailed the recovery process; our FY23 figures are broadly intact as we expect improvement in demand environment over the next 12 months.

We believe there are clear near-term margin headwinds amid aggressive discounting and raw material cost inflation.

Unless demand environment improves margins will continue to remain under pressure due to inferior sales mix (higher share of mass/value products which have lower margin).

However, we believe the company has done well on the cost management front which is expected to yield long-term results.

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