This stock in Rakesh Jhunjhunwala's portfolio zooms 200% in one year

VIP Industries hit a new high of Rs 538, rallying 200% in past one year from Rs 179 on August 2, 2017 as compared to 15% rise in the S&P BSE Sensex.

Shares of VIP Industries have moved higher by 10% to Rs 538 per share, also their record high on the BSE, after the company reported a strong 55% year on year (yoy) jump in its consolidated net profit at Rs 634 million in June quarter (Q1FY19). The company, which is engaged in manufacturing and marketing of luggage and bags, had a profit of Rs 410 million in the same quarter year ago.

Revenue from operations during the quarter under review increased 27% at Rs 5.18 billion against Rs 4.07 billion in the corresponding quarter of previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortization) margin improved around 350 bps at 18.58% from 15.07%.

VIP Industries in annual report said that though there was a bit of uncertainty due to GST during last year, the government has heeded the concerns of the industry and settled the GST rate at 18%. It will benefit entire luggage and bags industry and consumers.

“VIP is likely to record strong volume growth in the luggage space, and growth in brands like VIP would help safeguard gross margins to a certain extent. Besides, we feel the current scale of business would protect profitability during volatile times,” analysts at Equirus said in recent report.

In past one year, VIP Industries has outperformed the market by surging 200% from Rs 179 on August 2, 2017 as compared to 15% rise in the S&P BSE Sensex.

Ace investor Rakesh Jhunjhunwala holds 5.21 million equity shares or 3.69% stake in VIP Industries as of June 30, 2018, the shareholding pattern data shows. These shares valued at Rs 2.78 billion based on current market price.

At 02:07 PM; VIP Industries was trading 9% higher at Rs 535 on the BSE, as compared to nearly 1% rise in the S&P BSE Sensex. The trading volumes on the counter jumped five-fold with a combined 5.49 million equity shares changed hands on the BSE and NSE so far.