VIP Industries Q2 Results Review - Short-term Troubles Continue; Maintain 'Hold': Axis Securities

Axis Securities Report

VIP Industries Ltd. posted weak results in Q2 FY25, with revenue at Rs 544 crore, down 0.3% YoY. Gross margins contracted by 1,043 basis points to 45.1%, while Ebitda margins declined by 1,008 bps YoY to -0.4%.

This was primarily due to subdued gross margin performance driven by an unfavourable mix and higher discounts, along with an increase in ad spend and overhead costs due to additional warehousing from high inventory levels. The company reported a net loss of Rs 33 crore.

Although the company’s long-term strategy—focusing on premiumisation and improving operational efficiencies—remains intact, the execution of this strategy has a longer gestation period and will take time to yield significant results.

Consequently, a "wait and watch" approach is maintained as we look for sustained signs of recovery in the company’s overall performance.

We maintain our Hold rating on the stock and value the company at 30 times Dec-26 EPS with a revised target price of Rs 440/share.

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