February 16, 2017 / 01:12 PM IST
VIP Industries’ (VIP) Q3FY17 revenue of INR 3.1bn (up 6% YoY) and EBITDA of INR 260mn (up 42% YoY) came 11% and 17% above estimates, respectively. Domestic luggage grew 10% in volume and value terms, despite demonetisation concerns. Gross margin expanded 378bps YoY to 47.8% and EBITDA margin moved up 216bps due to better negotiation with suppliers.
Outlook
We estimate it to post robust 22% PAT CAGR and 452bps RoCE expansion to 35% over FY17-19E. We maintain ‘BUY’ with TP of INR 179 (on 22x FY19E EPS). At CMP, the stock trades at 18.2x FY19E EPS.
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