Initiating Coverage: VIP Industries Ltd - BUY - TP Rs.325 - Kotak

We initiate coverage on VIP Industries (VIP) which is the market leader in the organized luggage industry in India with more than 50% market share, manufacturing and supplying a wide range of hard sided and soft-sided luggage. We expect the company to maintain a strong growth momentum with increasing penetration of luggage bags and back-packs, healthy GDP growth, improving disposable income, increased air and rail travel and with increased use of luggage as a gifting tool. We estimate revenue CAGR of 17% and earnings CAGR of 28% over FY17 to FY20E with improvement in operating margins and return ratios. We believe VIP would be one of the major beneficiaries of healthy GDP growth, rising income level, changing life style and implementation of GST. We initiate coverage on the stock with a TP of Rs 325 valued at 30x FY19 earnings.

Shares of V.I.P.INDUSTRIES LTD. was last trading in BSE at Rs.243.35 as compared to the previous close of Rs. 249.4. The total number of shares traded during the day was 114677 in over 2066 trades.

The stock hit an intraday high of Rs. 249 and intraday low of 237. The net turnover during the day was Rs. 27844923.

Source : Equity Bulls

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