VIP Industries Ltd., incorporated in the year 1968, is a Mid Cap company (having a market cap of Rs 5112.15 Crore) operating in Plastics sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 259.30 Crore, up 6.79 % from last quarter Total Income of Rs 242.82 Crore and down -18.16 % from last year same quarter Total Income of Rs 316.84 Crore. Company reported net profit after tax of Rs -3.78 Crore in latest quarter.
Investment Rationale
The company has implemented close to ~ Rs 170 crore fixed cost savings in FY21 (overall opex down 51% YoY in FY21). VIP believes ~50% (Rs 80-85 crore) would be sustainable in FY22E. Given the near term headwinds and Q1 being critical for VIP, the brokerage reduces revenue estimates for FY22E. It broadly maintains estimates for FY23E as it expects improved traction in the domestic travel industry from H2FY22 onwards. While revenue recovery may take longer, structural changes in fixed overheads will lead to faster recovery in profitability terms. The company is well placed on the liquidity position as it continues to be net cash positive. Given VIP’s healthy balance sheet and strong manufacturing capabilities in Bangladesh (soft luggage), the brokerage expects it to be able to effectively manage in the challenging environment
Promoter/FII Holdings
Promoters held 53.46 per cent stake in the company as of Dec 31, 2020, while FIIs held 3.04 per cent, DIIs 14.72 per cent and public and others 28.78 per cent.
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
