Stock & Profit

VIP Industries (VIPIL)

VIP Industries (VIPIL), incorporated in 1968 ,is engaged in the business of manufacturing of luggage bags. The company's manufacturing facilities are located at Nashik, Nagpur, Jalgaon, Satara, Sinnar in Maharashtra and Haridwar in Uttaranchal. The company is also engaged in manufacturing of moulded furniture.

The company is engaged in manufacturing of moulded luggage (from high-density polyethylene), soft luggage (from nylon, polyester, jupolene, printed polyester) and ABS luggage (from acrylonitrile butadiene styrene plastic) including briefcases, suitcases, handbags, carry bags and vanity cases.

VIP has been promoted by the $200 million DG Piramal Group. The company has a design team, which is constantly focusing on innovating, constantly innovates, exploring new technologies and materials to create luggage of high quality.

VIP owns subsidiaries namely Carlton Travel Goods and Carlton and Blow Plast Retail.

Globally. the company has a presence in Indonesia, Hong Kong, Russia, Canada, Iceland, Ghana, Malta, Spain, France, Belgium, Ireland, Sweden, Poland, Finland, Greece and Lebanon among others.

Manufacturing facilities
The companys' manufacturing facilities are equipped with latest technology and the products go through various tests such as jolt test for handle and lug fixing, wheel test-belt for wheel assembly, tumble test, pendulum test and pressure test.
Today, the company own brands like Delsey, Alfa, Footloose, Carlton, Aristocrat and Skybags.

VIP Industries also has a retail chain under the brand name VIP Lounge where all of its brands are marketed. The company has plans to increase its retail presence in India.

As per the announcement made by VIP to the exchange, the co will announce only audited results for FY 08-09 and therefore there will not be any un-audited results.

The polymer prices had fallen very steeply on global meltdown in Oct 2008 and co had reported poor results in Q3 due to high cost inventory. The analysts expect that the Q4 nos will be definitely better than Q4 as the raw material prices were down by almost 60%. This should help co report better margins.
The stock has been consolidated between 34 and 45 for a very long period of time. The grape wine suggests few smart operators are becoming active in this counter though the liquidity is very poor in the counter.

Keep close watch on this counter as it could very soon explode beyond its 200 DMA which will generate technical buy call.

Book value of VIP of Rs 42.39 and CEPS was 12.83 and core EBITA margins were 11%. VIP has been giving Rs 3 per share dividend and belongs to reputed group of industries. It offers close to 8% tax free yield which makes VIP a strong investment idea for retail and yield lover investors.

The reason for strong recommendation for this stock is that FII holding has become .04% in this stock which practically means the stock is in the full control of operators who are trying to control the prices artificially. In absence of FII selling this stock could be out performer in next 12 months. Only long term investors should enter this stock for better yield and huge capital appreciation.

BY CNI RESEARCH