Mehabe score: 3 G Factor: 2 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 3.
Description
VIP Industries is engaged interalia, in the business of manufacturing and marketing of luggage, bags and accessories.
Main Points
Market Leadership #
VIP industries remains as the Asia’s largest and the world’s second largest # luggage manufacturer, with 51 years of legacy the company have sold more than 100 millions of luggage’s throughout the world.Site:VIPINDMain Symbol:VIPIND
Stock trades at 414.0, above its 50dma 388.5. It also trades above its 200dma 359.5. The stock remains bullish on techicals
The 52 week high is at 437.70 and the 52week low is at 254.85
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 11.30 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.29% over past five years.
– has a low return on equity of 11.49% for last 3 years.
-Debtor days have increased from 68.50 to 87.61 days.
Competition
– The industry trades at a mean P/E of 0.0x. V I P Inds. trades at the industry’s max P/E of 0.0x. VIPIND trades at a P/E of x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 3.0. VIPIND has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is 11.2%. The max 1- month return was given by Safari Inds.: a return of 15.17 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 243.0 cr compared to Rs 310.66 cr for period ended Mar 2020, a fall of 21.8%
Operating Profits reported at Rs 3.2 cr for period ended Mar 2021 vis-vis 32.97 for period ended Mar 2020 .
Operating Margins contracted -929.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.27 compared to Rs -0.5 for previous quarter ended Dec 2020 and Rs 0.67 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 619.0 cr for period ended Mar 2021 vis-vis sales of Rs 1718.0 cr for the period ended Mar 2020, a fall of 177.5%. The 3 year sales cagr stood at -24.0%.
Operating margins shrank to -11.0% for period ended Mar 2021 vis-vis 17.0% for period ended Mar 2020, contraction of 2800.0 bps.
Net Profit reported at Rs -97.0 cr for period ended Mar 2021 vis-vis sales of Rs 112.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -17.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 41% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -64% vis-vis a compounded sales growth of -24% over the last 3 Years. – The compounded profit growth on a TTM basis is -166% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 2.98% vis-vis 2.97% for Mar 2021 – Public shareholding has fallen for the period ended Jun 2021. The Jun 2021 public holding stood at 23.09% vis-vis 26.84% for Mar 2021
Conclusion
– – Stock is trading at 11.30 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.29% over past five years.
– has a low return on equity of 11.49% for last 3 years.
-Debtor days have increased from 68.50 to 87.61 days.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 388.5 and is trading at 414.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
