Prabhudas Lilladher's research report on V.I.P. Industries
Recently, we hosted VIP Industries for a roadshow wherein management highlighted plans to 1) scale brand Caprese by 5x 2) increase exports share to 15% and 3) double the number of EBOs to ~1,000 over next 3 years. The upstream transformational journey continues with plans to further backward integrate into manufacturing of trolleys, wheels and locks (forms ~35-50% of the cost). We believe benefits of owning the value chain (share of in-house manufacturing to be at ~75-80% in FY23E) will start reflecting soon, as input cost pressure has started stabilizing. On the demand front, outlook continues to remain robust and VIP is on track to achieve Rs20bn in top-line with an EBITDA margin of ~18-19% in FY23E. We increase our FY23E/FY24E EPS estimates by 1%/5% and introduce FY25E EPS of Rs25. Amid emergence of new twin levers (handbags and exports) we expect sales/PAT CAGR of 15%/26% over FY23-25E.
Outlook
Retain BUY with a revised TP of Rs1,020 (45x Sep24 EPS; no change in target multiple but we roll forward).
More Info
At 15:43 hrs VIP Industries was quoting at Rs 663.70, up Rs 13.65, or 2.10 percent.
It has touched an intraday high of Rs 668.60 and an intraday low of Rs 645.05.
It was trading with volumes of 29,572 shares, compared to its thirty day average of 33,745 shares, a decrease of -12.37 percent.
In the previous trading session, the share closed down 2.90 percent or Rs 19.40 at Rs 650.05.
The share touched its 52-week high Rs 774.50 and 52-week low Rs 485.25 on 31 March, 2022 and 29 September, 2021, respectively.
Currently, it is trading 14.31 percent below its 52-week high and 36.77 percent above its 52-week low.
Market capitalisation stands at Rs 9,397.25 crore.
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