Jhunjhunwala (3.69 per cent) and his wife Rekha (1.62 per cent) together held a 5.31 per cent stake in the luggage maker as of December 31. That shareholding came down by 299 basis points to 2.32 per cent by the end of March, with only Rekha owning the company’s shares. It could not be ascertained whether Rakesh still holds the company’s shares, as corporates are required to report shareholding details of investors with more than 1 per cent stake.
Data showed the VIP stock has entered a bear grip, having plunged 21 per cent from its March 4 high of Rs 421.95 thanks to a steep rise in Covid-19 cases. Brokerage Axis Securities said it expects the company to log a loss of Rs 7 crore for the March quarter, as against a profit of Rs 10 crore for the corresponding period a year ago.
“Gross margins will be impacted due to rise in raw material prices while the Ebitda margin will be impacted due to a weak product mix. We expect the company to report a net loss due to sluggish growth in the travel and tourism industry. Key monitories would be demand trends in wake of new restrictions to contain cases,” it said.
Prabhudas Lilladher said the company saw good sales momentum in January and February, but faced a slowdown in March due to rising Covid-19 cases. It also said that Covid-hit regions such as Maharashtra, the NCR, Gujarat and Karnataka account for more than 40 per cent of the company’s sales.
VIP’s sales had just reached 54 per cent of pre-Covid levels in Q3, after 25 per cent in Q2, and only 7 per cent in Q1. Besides, the company had to take a price hike of 6 per cent from March itself to counter inflationary pressures.
“Considering that Q1 is typically the strongest quarter for luggage companies, if the current Covid situation does not improve in near term, we do not rule out a spillover of sales due to cancellation/postponement of weddings/leisure travel,” it said.
