VIP Industries Q4FY25: Work in Progress, But Gears Are Turning
VIP Industries closed Q4FY25 with a mixed bag. While volumes saw healthy growth, operational performance remained underwhelming. The company has acknowledged the drag and is gearing up to pivot—with a sharper focus on digital, modern trade, and brand revival.
What Went Well?
Let’s start with what worked:
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Volume growth came in at 10% YoY, which is respectable given the broader demand concerns.
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Institutional sales continued to grow, reflecting strength in non-retail channels.
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Net borrowing reduced by ₹118 crore, consistent with their deleveraging plan.
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Inventory came down by ₹224 crore compared to March 2024, which helps ease working capital pressure.
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Most importantly, management has outlined a 12-month roadmap to reclaim market share and revive brand strength.
This shows that while the numbers may not shine yet, the intent and direction are clearly set.
Where It Fell Short
Despite the positives, a few cracks were visible:
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Operational performance was weak, missing margin or profitability markers.
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The industry continues to see soft demand, with inventory liquidation and intensifying competition playing spoilsport.
The silver lining? The company seems to be facing challenges head-on, with strategic pivots already in motion.
What’s Next for VIP?
Looking ahead, VIP is expected to double down on digital marketing, e-commerce, and modern trade—channels that have become crucial for reaching younger, value-conscious consumers.
The company is also betting on brand repositioning and premiumisation to build stronger consumer connect and pricing power over time.
The Numbers That Matter
| Metric | Q4FY25 Highlights |
|---|---|
Volume Growth | +10% YoY |
Net Borrowing Reduction | ₹118 crore |
Inventory Reduction | ₹224 crore (vs.Mar 2024) |
FY27E Earnings Growth Forecast | +58.1% |
P/E on FY27E EPS | 28.9x |
Revised Fair Value (Target) | ₹385 (↓ from ₹480) |
The stock is currently trading at a P/E of 28.9x on FY27E EPS, and the fair value has been revised downward from ₹480 to ₹385, based on a more realistic 33x FY27E multiple.
While near-term execution is key, there’s enough in motion to warrant a continued ‘ADD’ stance.
Final Word: A Rebuilding Phase
VIP isn’t back in full stride just yet, but it’s clearly in a transition phase—reducing debt, cleaning up inventory, and sketching a recovery blueprint.
The next few quarters will be crucial to see how well that blueprint translates into performance.
Disclaimer & Full Report
This feature is based on a synopsis of a research report issued by Kotak Securities Limited. For the full story (and disclaimers), make sure to check out the original sources:
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