Vip industries q4 highlights~

Vip is a leader in luggage segment.
Due to covid their business is affected badly.

Revenue down 27% to 317 cr,
profit is down 40% to 10Cr. (YoY)

Situation is not good, big pain is ahead.
1/11

Business is suffering from a pain, so they have reduced their expenditure upto 30%. Reduced salaries + employees + adv + stores. Etc

(Plus you may see increase of debt on balance sheet.)
2/11

If the situation doesnt improve then we may see some write offs in receivables. They have taken some provision.
3/11

Management on market share.
Increase in market share is possible.
4/11

In future we will manufacture 100% from bangladesh. No more investment required.

Labour cost is low + low tax rates + no import duty from Bangladesh.

(20% import duty from china.)
5/11

Vip has 451 cr of inventory.
Advantage- They can sell it if demand resume, they can be a step ahead than competitor.

Disadvantage- Huge money got stuck in inventory. They have to take special care from damage. We dont know when situation will improve.
6/11

E–Commerce~
Vip is a leader in luggage with 55% market share. But they are not leader on e-commerce platform. This is the area where vip has to work.

Between 5 to 15 % sales comes from e-commerce for vip.
7/11

Management on Amazon basics.

(I think private labelling will always be a challange for so many sectors including luggage.)
8/11

Revenue forecast – it depends on the disease, government. It is impossible for us to give any estimates.
9/11

Overall situation seems not well. Business is affected badly. Picture will be more clear if you read the concall scrip plus we have to see q1 n q2.

Though management is confident on turnaround but it's dapend on the disease.
10/11

Stock has fallen significantly due to such situation.

But one thing is clea, once demand is back there, then this will be the first player to get benefit.

Sharing only for info purpose.
No holding, no recommendation.
Thanks.
11/11