VIP’s Dilip Piramal Isn’t Worried About The Falling Rupee

India’s largest luggage and backpack maker VIP Industries Ltd. is not worried about the depreciating rupee as a weaker Chinese yuan offsets any increase in costs.

“We have to realise that the rupee depreciation is not so much depreciation, but the strength of the dollar. That strength is also reflected in the Chinese yuan,” said Chairman Dilip Piramal in an interview with BloombergQuint. “We have a commanding position as a buyer there, so we are able to contain prices better than our competitors.”

VIP Industries purchases 60 percent to 70 percent of its inventory from China, the company had said in a conference call after its earnings for quarter-ended September 2017. It is also the second-largest buyer of luggage in China and has been steadily increasing its purchases over the last eight to nine years, Piramal said.

The rupee has fallen 8.9 percent this year so far to 70.11 per dollar, making it Asia’s worst-performing currency.

Here are the other highlights from the conversation:

• All brands and segments have been performing well on India’s strong economy and growing penetration.
• Expect operating margins to expand on the back of sharp growth in top line.
• Gained substantially from the unorganised sector.
• Won market share by a few percentage points from peers.
• Gained the most from backpack segment.

The stock has risen over 78 percent in 2018 so far compared with a 15.1 percent rise in the S&P BSE Sensex Index.

Watch the interview here