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VIP Industries Q1 Review - Gross Margin Springs A Positive Surprise: Prabhudas Lilladher

VIP Industries Q1 Review - Gross Margin Springs A Positive Surprise: Prabhudas Lilladher

<div class="paragraphs"><p>A traveler walks with luggage inside the international terminal.&nbsp; (Photographer: David Paul Morris/Bloomberg)</p></div>
A traveler walks with luggage inside the international terminal.  (Photographer: David Paul Morris/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Prabhudas Lilladher Report

We increase our FY22/FY23 earnings per share estimates of VIP Industries Ltd. by 44%/5% respectively as demand recovery post second wave is significantly better than our original anticipation (sequential top-line decline of just 15.1% in Q1 FY22 despite lockdown-like restrictions).

However, bigger surprise was gross margin expansion to 50.9% (almost similar to pre-Covid-19 levels) resulting in significant earnings upgrade for FY22.

In the entire last fiscal, VIP Industries faced headwinds on margin side with a fear that demand recovery will be back-ended and restoring margins to pre-Covid-19 levels can be a tall task given stiff competition and raw material cost inflation.

Click on the attachment to read the full report:

Prabhudas Lilladher VIP Industries Q1FY22 Result Update.pdf

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