- VIP and Safari lead the Indian luggage market in mass and mid-premium segments
- VIP expected to grow revenue and EBITDA at 10% and 73% CAGR from FY25 to FY28
- Safari reported 36% revenue CAGR over FY22-25 and targets 16% revenue CAGR FY25-28
VIP and Safari are the leading players in the Indian luggage industry, commanding strong market positions across mass and mid-premium segments. While travel, tourism, and weddings remain consistent demand drivers, the brokerage believe the sector's structural growth is increasingly fueled by the resurgence of academic activities, rising international student mobility, and accelerating premiumization trends.
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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:
weak macro and geopolitical shocks affecting travel and tourism,
intense price competition in the mass segment,
slower adoption of hard luggage in Tier 2/3 markets,
higher imports by unorganized players from China, and
rising input costs and increased trade discounting, adversely impacting operating margins.
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