Luggage stocks such as VIP Industries and Safari Industries, which have recently recovered from their recent lows, are likely to continue the momentum in the coming months, as rising domestic and international travel demand and a shift to branded products will enable these companies to see robust volume and value growth, according to analysts.
Motilal Oswal, in its latest report, has initiated coverage on both VIP Industries and Safari Industries with a ‘Buy’ rating, setting target prices of ₹530 and ₹2,700, respectively. The brokerage believes both companies command strong market positions across the mass and mid-premium segments and are well-positioned to benefit from rising demand for luggage products.
While travel, tourism, and weddings remain consistent demand drivers, it believes the sector’s structural growth is increasingly fueled by the resurgence of academic activities, rising international student mobility, and accelerating premiumization trends.
Given these multi-dimensional tailwinds and their established brand equity, the brokerage believes both Safari and VIP are strategically positioned to expand market share and deliver healthy earnings growth.
“We initiate coverage with a buy recommendation, expecting them to capitalize on both volume expansion and value premiumization, supported by effective product, channel, and brand strategies aligned with evolving consumer preferences,” said the brokerage.
As per the brokerage projections, the Indian luggage industry is projected to reach ₹267 billion by CY28, registering a CAGR of 12% over CY23-28. After contracting sharply to ₹60 billion in CY20 due to the pandemic, the sector rebounded strongly, clocking a 37% CAGR between CY20 and CY23.
Branded players, holding a 52% market share in CY23, are expected to outpace overall industry growth.
VIP to regain lost market share, Safari set for market expansion: MOSL
Following a series of sharp underperformances, with industry tailwinds and a change in top management, Motilal Oswal expects VIP to be geared up to regain its lost market share, coupled with a sharp improvement in operating margins.
It anticipates revenue and EBITDA CAGR of 11% and 45%, respectively, over FY25–FY28E, driven by volume growth and a sharp improvement in the margin profile.
The brokerage expects Safari to deliver industry-beating growth to expand its market share, focusing on building the Urban Jungle brand along with Safari-Select (premium positioning), ramping up capacity utilization at Jaipur, building in-house manufacturing of ancillary components, and adding 50 EBOs every year.
“We have modelled revenue, EBITDA, and APAT CAGR of 16%, 25%, and 27% over FY25–FY28E, driven by healthy volume growth and improving margin profile,” said the brokerage.
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