VIP Industries - A ‘Bagful Of Opportunities': HDFC Securities Initiates Coverage

HDFC Securities Retail Research

VIP Industries Ltd.'s leadership position in the Indian market provides it with significant scale, strength and experience to grow its position globally.

It is already the largest manufacturer in Asia with its in-house production giving the company an advantage in terms of cost competitiveness.

In recent years, it has further strengthened its manufacturing capabilities and reduced sourcing from China to only 8%.

VIP remains committed to further growing its manufacturing capacity and maintaining overall in-house manufacturing of ~70-80% (versus ~50-55% pre-pandemic) through its Indian and Bangladesh units by FY22-23. This high level of back-end control will not only aid the gross margin expansion but will put VIP Industries on the global map.

Pandemic induced slowdown in demand gave VIP’s pro-active management, the opportunity to modify its supply chain and operations.

The company was able to significantly enhance its upstream control, thereby bringing in sustainable cost efficiencies and walking out leaner in the aftermath of pandemic.

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