VIP, Safari Industries Gets Motilal Oswal's 'Buy' Rating As It Initiates Coverage

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Motilal Oswal Report

We initiate coverage on VIP Industries Ltd. and Safari Industries India Ltd. with a Buy rating.

VIP Industries

Following a series of sharp underperformances, with industry tailwinds and a change in the top management, we expect VIP to deliver robust revenue/Ebitda at a CAGR of 10%/73% over FY25-FY28E, driven by volume growth and sharp improvement in margin profile.

We initiate coverage on VIP with a Buy rating and a DCF based target price of Rs 530 (implied P/E of 47x on Sep’27).

Safari Industries

A leading player in the mass-luggage industry that outpaced industry growth with ~30% market share (b/w the top players), Safari has reported a revenue CAGR of 36% over FY22-25.

With its focus on building Safari Select/Urban Jungle (premium positioning) and enhanced capacity at Jaipur, the company is expected to deliver a revenue/Ebitda/adjusted profit after tax CAGR of 16%/25%/27% over FY25- FY28E, driven by healthy volume growth and an improving margin profile.

We initiate coverage on Safari Industries with a Buy rating and a DCF based target price of Rs 2,700 (implied P/E of 50x on Sep’27).

Key risks:

1. weak macro and geopolitical shocks affecting travel and tourism,

2. intense price competition in the mass segment,

3. slower adoption of hard luggage in Tier 2/3 markets,

4. higher imports by unorganized players from China, and

5. rising input costs and increased trade discounting, adversely impacting operating margins.

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