Vip Ltd. Industry : Moulded Luggage

Only available on StudyMode
  • Topic: Market share, June 9, 1916
  • Pages : 8 (1493 words )
  • Download(s) : 39
  • Published : April 16, 2013
Open Document
Text Preview
JV CAPITAL SERVICES PVT. LTD
www.sharetrading.in
VIP LTD. INDUSTRY : MOULDED LUGGAGE
NSE Symbol : VIPIND

CMP 115 RISK PROFILE: MEDIUM

BUY TARGET 210

Key Data :
52 week H/L : Market Cap (Rs Cr.) : Face Value : Beta : P/E : Div % : BV : PBV : (Source : Company)

294/32 314 10 0.92 26 0.87 48.9 2.3

VIP Industries is engaged in the travel product business. The Company operates in two business segments: luggage & accessories and furniture. The products manufactured by the Company includes plastic moulded suitcase, plastic moulded briefcase and vanity case. The Company’s portfolio of brands includes V.I.P., Carlton, Delsey, Footloose, Alfa, Aristocrat and Skybags. The Company’s subsidiaries include Carlton Travel Goods Ltd. and Blow Plast Retail Ltd.

INVESTMENT RATIONALE
Despite the slowdown in the global trends of economy, the luggage markets performed flat. VIP Industries is the largest player in Indian luggage market. One of the large segment of Indian luggage market is the canteen Store Department (CSD). VIP luggage continues to enjoy a prominent position and is one of the most respected brands in CSD. Apart from the domestic market, the company also exports sizeable quantity of luggage to Europe & gulf and has presence in Africa & many other countries. With a view to expand and to access the international markets, the company during FY09 has set up a wholly owned subsidiary in UK. The company has also acquired the well known international luggage brand ‘CARLTON’. These developments are expected to augment export sales of the company significantly. The company has been focusing on creating exclusive outlets to increase market share.

Share Holding Pattern (%):
35.73 %

43.44 %

VALUATION:
12.90 % 0.97% 6.96%

Promoters DIIs Others

FIIs corporates

Relative Performance Analysis:

SENSEX VIP IND

We are cautiously optimistic for the moulded furniture segment of the company. In case of luggage segment the management of VIP is very positive. The product portfolio of the company has been widened by introducing new products which offers good growth prospects. In FY08, earnings of the company have decreased. Revenues reflect a decrease in income from operation. Net loss reflects higher administrative, selling and other expenses with increased extraordinary items expenses. Currently the company is trading at a P/E 14.14x of CY09 EPS. Albeit the price earning ratio of the company is high, we maintain a ‘BUY’ on the stock as it is in an expansion mode with a promising business model. (Rs cr) Financial Summary Year Net Sales Total Expenses PAT EPS

FY2005 FY2006 FY2007 FY2008
(Source : JVCS RESEARCH)

297 329 557 544

272 303 404 504

7.27 7.9 22 14

4.73 4.94 5.20 6.60

SEPTEMBER 02’2009

JV CAPITAL SERVICES

VIP LTD.
INDUSTRY PROFILE
Indian Luggage industry is currently undergoing a consolidation phase. The luggage market comprises of three segments: the premium segment with 15% of total market share, the popular segment and the standard segment. VIP Industries is the most dominant player in the premium segment with a market share of 44% in popular segment The luggage market is dominated by the unorganized sector with 5% market share. Northern & western India are the biggest markets in the industry. The organized sector (8%) is growing at lesser pace when compared to the unorganized sector (25%)

250 200 150 100 50 0

I nde x e d Sa l e s Tr e nds

BUSINESS UPDATES:
In the moulded furniture segment, VIP industries enjoys a small market share, where the company has a huge potential to grow in this business. The company is now able to get the orders from Pune and is able to successfully execute the same in time. During the year, VIP industries has strengthened its distribution hold by significantly increasing its market presence through opening of new shops for Aristocrat & Alfa Brands across the countries. This will significantly contribute in the balance sheets of the...
tracking img