Thread by @tycoonmindset05

VIP Industries Con Call was today at 5 PM!

Here are the Key highlights of the Conference Call😀

@MAJORshailendra @BaluGorade @MrRChaudhary
@equitybulls @SmartSyncServ @Stockcentric1

Updates:

-It will take a year or two to reach at Pre-Covid Levels
-They are trying to get more international business
-Planning to expand their Bangladesh business
-There was some loss in average selling price this quarter
-They are 2nd largest Luggage company in the World

Strategy:

-E-comm sales is 27% and this is going to be their material channel ahead
-It will continue to be in this range
-Amazon and Flipkart would be like their departmental/retail stores and simultaneously they would be having their exclusive stores also

-Currently they have inventory due to which gross margins might impact but eventually it will get recovered
-They don't intend to borrow further

Allied Industries:
Management's comment:

-Hotels and Airlines are in worst situation and would take time to recover
-Allied industries have more fixed costs and luggage industry has more variable costs

-Company is not in a rush to start a new business
-Buying Ladies Handbags from China which made easier for them to manufacture in Bangladesh for Indian Market
-Margins are going to be lower only because sales have come down
-Fixed costs saving would be ~160cr & 50% is sustainable

-They are very strong in the areas where navigation is present
-Currently there is no pent up demand from marriages especially in summer and winter
-In April and May their highest selling state is Bihar and eastern UP

-There are many stores which are recovering like Brand Factory and Big Bazaar, etc from where money is starting to rotate
-The new line of business they had entered last quarter is now on hold

-There are various lines of material available, for Ecommerce they would be using cheaper quality to reduce the costs and price to make margins and selling.
-Ecommerce has now become so much with volume due to unorganized players

-Bag packs are main stream for schools and colleges segment so once they restart, Bag packs will recover faster
-Still there is small gradual recovery due to marriages and travel recovering back
-100 out of 250 EBOs are closed
-There's nobody in India they want to acquire

-Haridwar facility was made bcz they were getting tax benefits but now those benefits have ended & they can make that production at Nasik/Bangladesh
-They are happy that they got immediate buyer for Haridwar facility
-Transaction is still not completed which will flow in next qrt

-And the Profit share of 27 cr from Haridwar would be shifted to Nasik
-They are very low cost manufacturer in Bangladesh
-International Sales had 10-15% share

Refer to our Q2FY2021 Con Calls here👇
thetycoonmindset.com/conference-cal…