The luggage industry in India is one of the fastest-growing sectors with a promising future ahead. The country has two listed players in the luggage industry, VIP Industries and Safari Industries, which have shown divergent trends in their share prices recently. VIP Industries has fallen about 16 percent, while Safari Industries has grown up to 130 percent.

Share Market Live

NSE

Anand Rathi, a leading financial services company, recently initiated coverage on the luggage sector and predicts that the organized players in the industry will see a growth rate of 15 percent over the next three to five years. This outlook offers investors an opportunity to bet on the growth prospects of the luggage industry in India.

Anand Rathi believes that despite VIP Industries' recent underperformance, the company is poised to catch up and offer better returns compared to Safari Industries in the future. This is due to four key growth triggers.

Firstly, VIP Industries is renewing its focus on the mass category, a sector in which Safari has been slowly gaining market share. Secondly, VIP Industries aims to double its international business, providing another source of revenue for the company.

Read Here | 91% of Vedanta's holding in Hindustan Zinc is now pledged

Further growth from their premium brand Caprese see is something that the street is eyeing and finally VIP Industries also looking at self-sufficiency and reduction of dependence on China. So these factors should help them going forward and over and above everything else.

Also this underperformance has made VIP a lot more favorable when it comes to valuations as against Safari industries. VIP Industries is currently sitting at 30 times one year forward earnings, while Safari Industries is at 35 times.

Also Read | JPMorgan remains underweight on Indian IT over earnings, downgrade risks

First Published:Apr 20, 2023 4:26 PM IST