VIP Industries shares jump 15% on brokerage upgrades. Here’s what they recommend
VIP Industries jumped nearly 15% on Thursday to hit the day’s high of Rs 534 on the NSE after a couple of domestic brokerages upgraded the stock following the company’s analyst meeting. Prabhudas Liladher and Centrum have raised their ratings on the stock to ‘Buy’ with a revision in their price targets.
The stock provides valuation comfort on the back of correction and management's focus on innovation, premiumisation, and improving supply chain gaps is lending comfort to these brokerages.
The stock has been a market laggard, witnessing a price erosion of 7% over the past 12 months, while losing 14% in 2024 so far.
Prabhudas Liladher has upgraded the stock to 'Buy' from 'Hold' rating for a target price of Rs 603, which has been revised up from earlier Rs 589. Its upgrade is driven by a 30% correction over the last six months and the ensuing valuation comfort. According to Prabhudas, VIP traded at a 17% discount to its LPA history of the past 10 years.
While management alluded to muted demand post-festival season due to weak consumer sentiments, supply constraints, and rising discounts to cut system inventory, it remains optimistic on demand recovery and aspires to grow revenues ahead of peers at 15%-18% in FY25, Centrum said. The gains are likely to be on account of the company's focus on new product development and design innovation towards premiumisation. It is also working towards strengthening the supply chain and agility on ground execution.
In Centrum's view, the recent price correction provides a
