Thread by @Fibonalysis

#VIPIndustries
#TechnoFunda
#Fibonalysis

1/n VIP Industries Ltd. is Asia’s largest and the world’s second largest luggage manufacturer, headquartered in Mumbai.
Company has more than 8000 retail outlets apart
from a well-developed network of retailers in 50 countries.

FY19-20 AR:
2/n The Company wants to expand its footprints in various spheres in addition to existing luggage business and the Company is exploring various options / avenues available to the Company that can give significant contribution in overall performance of the Company.

FY19-20 AR:
3/n The Company has adequate resources for undertaking new business activities in addition to its existing luggage business, it is in the interest of the Company and its Shareholders that the activities of the Company be diversified.

4/n Your company sources luggage and bags from Chinese factories, 3rd party vendors in India and manufactures its own products in its plants in India and Bangladesh. Your company expects to reduce its purchases from China and increase its production from India and Bangladesh.

5/n As on 31st March, 2020, the Company has 1 Indian and 4 overseas wholly owned Subsidiaries.

The number of permanent employees on the rolls of the Company 2095 (excluding the employees of the Subsidiary companies).

6/n Percentage to total turnover of the company
Hard Luggage’s: 32%
Soft Luggage’s: 68%

7/n The sudden onset of Covid-19 in middle of March significantly impacted Q4 sales and its negative impact on sales is expected to continue in 20-21.

8/n Ecommerce witnessed the strongest growth amongst all channels, suggesting that Indian consumers are beginning to prefer shopping from home compared to visiting markets, a trend which will only increase due to Covid-19.

9/n The International Business of your Company has declined in recent years and now contributes to less than 5% of the company’s total turnover.

We expect sales for 20-21 to be 30%-50% of 19-20 sales.

10/n Your Company is also exploring newer opportunities in the PPE segment which is expected to have high demand for next 12-18 months.

The Board of V I P Industries at its meeting held on 09 July 2020 has approved NCD issue of up to 100 cr.(For Diversification?)

11/n Consolidated Numbers:
Net Revenue at 1730.82 cr vs 1784.66 cr (-3%)
Operating Income at 207.41 cr vs 208.11 cr ~Flat
EBITDA at 291.28 cr vs 224.72 cr +30%
PBT at 148.41 cr vs 214.94 cr (-31%)
PAT at 111.73 cr vs 145.27 cr (-23.09%)
EPS at 7.91 vs 10.28 (-23%)

12/n
Ms. Nisaba Godrej has voluntarily waived-off receipt of sitting fees for any meetings attended by her.

Mr. Dilip G. Piramal, Chairman, voluntarily chose not to receive any commission for his services rendered to the Company for the Financial Year 2019-20.

13/n
I believe the company will have a tough time in FY21 and one needs to watch closely as to which segment and what plans are executed by VIP Industries towards their intent of diversification.
Stock is expensive as on date based on FY20 EPS and also on expected earnings.

14/n
Attached technical chart gives a perspective of stock outlook based on trend and patterns.
Chart is for educational purpose.
Request to consult for expert advice in case required.