V.I.P. Industries (507880) Q4 24/25 earnings summary

Executive summary

• Inventory reduced by over ₹200 crore, with operating cash flow improving to ₹292 crore positive from a negative ₹131 crore last year.

• Debt reduced by ₹118 crore, and a ₹357 crore contingent liability was eliminated due to a favorable tax judgment.

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

• Over 100 non-performing retail stores closed, focusing on profitability and premiumization through new launches and exclusive stores.

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

Financial highlights

• FY25 revenue at ₹2,189.35 crore, down from ₹2,256.71 crore in FY24; Q4 FY25 revenue at ₹494 crore, down 4% year-over-year.

• FY25 consolidated net loss of ₹68.79 crore, compared to a net profit of ₹54.30 crore in FY24.

• Q4 EBITDA margin at 2.1%, FY25 EBITDA margin at 4.3%; Q4 gross margin at 47%, FY25 gross margin at 45.6%.

• Net borrowing reduced by ₹118 crore; inventory reduced by ₹218 crore over March 2024.

• Employee benefit expenses reduced to 10% of revenue in FY25 from 12% in FY24.

Outlook and guidance

• Focus on further inventory and debt reduction by ₹150 crore each in FY26.

• Targeting double-digit growth, aiming to outperform category growth by 1-2%.

• Gross margin improvement initiatives underway, with a goal to return to 50%+ gross margin in FY26.

• Advertisement spend to increase by 2% but will be aligned with earnings.

• Board and auditors assessed the company and group as a going concern, with no material uncertainties disclosed.