VIP Industries vs Safari Industries: A Comprehensive Performance Analysis

Have you ever wondered about embarking on a journey without luggage? Certainly, luggage constitutes an indispensable aspect of every trip, enhancing your travel experience with comfort and relieving you of unnecessary worries. Trolley bags are as common as regular bags for every trip these days.

In the past, luggage used to be bulky and cumbersome, making it a challenge to carry. However, driven by growing demand and the preferences of the millennial generation, modern travel bags now feature a soft exterior shell and four wheels, offering both functionality and style in a range of vibrant colours.

The luggage industry in India has undergone a remarkable transformation over the years, evolving from traditional bags and suitcases to a dynamic sector that caters to diverse consumer preferences and needs.

With a blend of innovation, globalization, and changing lifestyles, the industry has not only kept pace with the demands of the modern world but has also contributed significantly to the country’s economy.

The advent of air travel as a common mode of transportation further accelerated the need for lightweight and durable luggage. This demand spurred the creation of innovative products such as trolley bags with multi-directional wheels, expandable compartments, and integrated security features like TSA-approved locks.

Today, we are comparing both listed players in India who are engaged in luggage manufacturing. Let’s explore both.

Starting with the company size, VIP Industries holds a market capitalization of Rs 10,070 crore, while the other player, Safari Industries, holds Rs 8,637 crore. The company’s share prices are trading at Rs 710 and Rs 3,650 per share, respectively, on the BSE at the time of writing this article.

Speaking about their stock performance, over the past month, VIP Industries has generated an impressive return of 19%, whereas Safari generated the same 19%.

When looking at the longer-term horizon, VIP Industries has generated a mere 21% return in the last year, while Safari Industries has achieved an impressive 158% during the same period.

Let’s delve into the financial performance during Q1 FY24. Starting from the top line, VIP Industries reported a revenue of Rs 636 crore, marking a YoY growth of 7%, while the operating profit stood at Rs 81 crore with an operating profit margin of 13%. The net profit of the company is Rs 58 crore.

On the other hand, Safari Industries reported a revenue of Rs 427 crore, showing a YoY growth of 46%. The operating profit stood at Rs 79 crore with an operating profit margin of 19%. The net profit of the company is Rs 50 crore.

Talking about some ratios, VIP’s ROCE and ROE are at 28% and 29%, respectively, while Safari’s ROCE and ROE are 37.5% and 34.4%, respectively.

After comparing both companies, Safari Industries stands out as a prominent player despite being smaller in size compared to VIP Industries in every aspect – revenue growth, operating profit margins, ROCE, and ROE. Moreover, in terms of stock performance, Safari has delivered an impressive return of 158% in the last year, whereas VIP has generated a mere 21% during the same period.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.