V.I.P. Industries (507880) Q3 24/25 earnings summary

Executive summary

• Achieved significant inventory reduction of INR 224 crores over nine months, with volumes down from 64 lakhs to 47 lakhs and debt reduced by INR 87 crores.

• Returned to profitability in Q3 with 6% EBITDA versus nil in the previous quarter, aided by cost rationalization and improved gross margins.

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

• Revenue for the quarter ended December 31, 2024, was Rs 501.07 Cr (consolidated), down from Rs 546.42 Cr in the previous year’s same quarter.

• Exceptional income of Rs 25.78 Cr recognized in the quarter, related to partial insurance claim receipt for fire loss at a Bangladesh subsidiary.

Financial highlights

• Q3 FY25 revenue at ₹501 Cr, down 8.3% year-over-year; 9M FY25 revenue at ₹1,684 Cr, down 3% year-over-year.

• Q3 FY25 EBITDA margin at 6.2%, down from 10% in Q3 FY24; 9M FY25 EBITDA margin at 4.9%, down from 11.1% in 9M FY24.

• Volume growth strong at 13% for Q3 and 14% for 9M FY25, but revenue declined due to lower average selling prices and inventory liquidation.

• Inventory reduced by ₹224 Cr over March 2024; net borrowing reduced by ₹86 Cr.

• Other expenses reduced to INR 150 crores, mainly due to lower warehousing and freight costs from inventory liquidation.

Outlook and guidance

• Confident of achieving 12% EBITDA margin in Q4, with a target of 15% for FY26, supported by ongoing cost and margin initiatives.

• Sequential improvement in gross margins and EBITDA, with a focus on inventory liquidation and procurement control.

• Premiumization and new product launches to drive margin and realization improvements post-liquidation phase.

• No explicit forward-looking guidance provided.