The share price of VIP Industries hit a fresh 52-week high of Rs 459.20 apiece on the BSE, surging over 18 percent on Thursday, after the company posted a consolidated net profit of Rs 2.53 crore in the quarter ended June 2021 as compared to a loss of Rs 51.32 crore in the year-ago period.

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The company's Q1FY22 revenue grew multi-fold to Rs 220.58 crore from Rs 58.21 crore, YoY.

Despite major sales channels bearing the brunt of localised lockdowns during the quarter under review, the sequential fall in top-line was just 15.1 percent, indicating no major slump in demand.

EBITDA stood at Rs 12.9 crore versus a loss of Rs 55.4 crore, YoY.

Domestic brokerage firm Prabhudas Lilladher upgraded the stock to 'buy' and increased FY22/FY23 EPS estimates by 44 percent/5 percent respectively as demand recovery post second wave is significantly better than expected.

However, the bigger surprise was GM expansion to 50.9 percent (almost similar to pre-COVID levels) resulting in a significant earnings upgrade for FY22, the brokerage said.

In the entire last fiscal, VIP faced headwinds on the margin side with a fear that demand recovery will be back-ended and restoring margins to pre-COVID levels would be a tall task given stiff competition & RM cost inflation.

As 1Q performance is noteworthy both on margin and demand recovery front, the brokerage increased its target P/E multiple to 30x (earlier 28x) and arrived at a target price of Rs 457.

At 12:10 pm, the shares of VIP Industries were trading 17.48 percent higher at Rs 453.60 apiece on the BSE.

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