VIP Industries stock down 40% in 20 months

Business: Shares of VIP Industries, a leading player in the Indian luggage market, have jumped 14.5 per cent in the last three weeks, marking a remarkable rebound after a prolonged decline. The stock, which lost 40 per cent of its value between November 2022 and July 2024, recently crossed the ₹500 mark for the first time since early June. The stock’s previous poor performance stemmed from weak financial results in the last few quarters, which led to losses in market share to new-age startups and international brands. Internal challenges along with external pressures also contributed to the company’s struggle. After meeting with the company’s senior management, domestic brokerage firm Centrum Broking has confirmed a positive outlook for VIP Industries.

The management indicated that they expect a meaningful recovery after Q2FY25, driven by several strategic initiatives. These include innovation in lightweight and durable designs, adding 50 exclusive brand outlets (EBOs) for the Carlton franchise to drive premiumisation, and strengthening the supply chain. Additionally, the management said it plans to focus on the high-growth backpack and handbag segment, capitalise on key wedding occasions, and leverage its strong distribution network. The brokerage highlighted VIP’s expansion of hard luggage production capacity through both brownfield and greenfield facilities in India. The company aims to meet the growing demand with a total capacity of around 20 lakh units per month, with 13 lakh allocated for hard luggage and 7 lakh for soft luggage. It noted the management’s focus on product development and design innovation to cater to a wider market with a diverse and competitively priced product range. VIP has engaged BCG to streamline operations and refresh its Skybags and VIP brands with new products and transparent pricing.