V.I.P. Industries (VIP IN) – Q2FY26 Result Update – A quarter of kitchen sinking – HOLD
Published on 17 Nov 2025
We cut our FY27E/FY28E EPS estimates by 21%/8% as we fine-tune our revenue and interest assumptions given weak performance in 2QFY26 (Refer section titled “key reasons for change in estimates” for more details). VIP IN reported weak set of results with topline declining 25.3% YoY to Rs4,063mn (PLe Rs4,898mn, CE Rs5,565mn) while GM succumbed to 30.6% amid inventory provision of Rs550mn. Adjusting for the inventory provision, EBITDA loss stood at Rs514mn (PLe Rs88mn; CE Rs321mn) as other expenses continue to remain elevated at Rs1,780mn. VIP IN has been facing problem of slow-moving inventory and provision of ~Rs750mn has been taken in the last 3 quarters. We believe 2HFY26E will be a period of reset and reorganization for VIP IN amid change of guard at top-level. We expect normalization to resume from FY27E with steady state GM/EBITDA margin of 51.5%/14.0% respectively. Consequent to rising challenges on growth & margins we cut our target multiple to 38x (earlier 40x; ~15% discount to SII IN) and retain HOLD on the stock with a TP of Rs387 (earlier Rs474).
