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Inventory Reduction: Reduced by over INR200 crore, approximately 25 lakh pieces.
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Cash Flow from Operating Activities: Improved to INR292 crores positive from a negative INR131 crore last year.
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Debt Reduction: Reduced by INR118 crores during the year.
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Contingent Liability: INR357 crore removed due to favorable judgment in indirect tax litigation.
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Volume Growth: 10% for the quarter and 11% for the full year.
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E-commerce Growth: 40% growth for both the quarter and full year.
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Store Closures: Closed more than 100 non-performing retail stores; currently 404 stores.
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Employee Benefit Expenses: Reduced to 10% of revenue from 12% last year.
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Space Reduction: Surrendered 4 lakh square feet of space in Q4, with an additional 3 lakh square feet in process.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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VIP Industries Ltd (BOM:507880) significantly improved its cash flows from operating activities, turning a negative INR131 crore last year into a positive INR292 crore.
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The company reduced its debt by INR118 crore during the year, strengthening its financial position.
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VIP Industries Ltd received a favorable judgment in a high-value indirect tax litigation, removing a contingent liability of INR357 crore.
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E-commerce emerged as the fastest-growing channel for the company, with a 40% growth rate for both the quarter and the full year.
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The company is focusing on premiumization with new product launches, many of which are made in India, reducing dependence on China and improving gross margins.
Negative Points
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The luggage industry is facing intense competition, particularly in the mid-price segment, leading to price wars and pressure on realizations.
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VIP Industries Ltd experienced challenges in profitability, with gross margins impacted by downward pressure on selling prices and inventory provisions.
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The closure of non-performing retail stores and modern trade stores by partners negatively impacted growth in these channels.
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The company had to take inventory provisions of INR5 crore, indicating challenges in managing slow-moving stock.
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Despite efforts to improve, the company missed its target of achieving a double-digit EBITDA margin, citing inventory reduction and channel partner issues as contributing factors.
Q & A Highlights
Q: Can you provide details on the current status of slow-moving inventory and the composition of your inventory? A: Manish Desai, CFO: The slow-moving inventory has been significantly reduced to a negligible amount. The inventory comprises approximately INR215 crore in raw materials, with the remainder in finished goods.