Robust Business Structure
VIP industries is the largest player of the luggage segment in the domestic markets with a market share of 58% in the domestic market. The company has also come up with the multiple brands to attract different customers from various age groups and various segments. The tourism industry is also growing rapidly in India which will benefit the organization to get higher growth. Strong brand value and large distribution network help VIP to penetrate the domestic market across the geographies. VIP has more than 10000 touch points and more than 700 VIP outlets. This help to increase customer reach of the retail segment and help to maintain the leading market share in the competitive environment.
Valuation
At the CMP of Rs. 103, VIP Industries Ltd is trading at 22.4 x it’s FY15E which we believe is underpriced and looks attractive. We attach an exit P/E multiple of 22.3x its FY16E EPS of 5.51 per share. Based on our valuation we arrive at the target price of Rs. 123 with a BUY rating & a potential upside of 19%
wow this bu.s. thinks stock is undervalued at 22x !!
Looks fully priced to me.