V.I.P. Industries (507880) Q2 24/25 earnings summary

Executive summary

• Inventory reduced by ₹174 crores over six months, with market share among organized players rising by 400 bps in the last two quarters.

• Maintains leadership in the organized Indian luggage market with a diversified product portfolio and strong brand equity across multiple price points.

• Operates 10 manufacturing facilities in India and Bangladesh, serving customers through ~13,500 points of sale in ~1,300 towns.

• Senior management team strengthened with experienced leaders across key functions.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, following Audit Committee review.

Financial highlights

• Q2 FY25 revenue at ₹547 crore, flat year-over-year; H1 FY25 revenue at ₹1,188 crore, also flat year-over-year.

• Q2 FY25 EBITDA at ₹-46 crore (margin -10%), impacted by lower gross margins and higher fixed costs; H1 FY25 EBITDA at 0% margin.

• Gross margin for Q2 FY25 at 45.1%, down from 55.5% in Q2 FY24; H1 FY25 gross margin at 44.7%, down from 52.3% in H1 FY24.

• Q2 FY25 sales volume was 4.4 million units, up 18% year-over-year.

• Net borrowing reduced by ₹35 crore; inventory reduced by ₹174 crore over March 2024.

Outlook and guidance

• Gross margin is expected to recover to 50% by Q4, with EBITDA margin guidance of 12% for Q4.

• Full-year FY26 gross margin target is 55%.

• Focus on inventory liquidation, procurement control, and premiumization of product mix.

• New launches in premium and value segments expected to drive future growth.

• E-commerce share is expected to decline in H2, with improved margins from channel and product mix.