VIP Industries Limited has informed the Exchange about Transcript of Earnings Conference Call on Audited Financial Results (Standalone and Consolidated) for the quarter and year ended March 31, 2025
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VIP Industries held its Q4 FY25 earnings call with the MD and CFO discussing audited results. Key balance sheet actions: inventory cut by Rs.200 crore (25 lakh pieces), debt reduced by Rs.118 crore, and a favorable tax judgment removed Rs.357 crore in contingent liabilities. Operating cash flow swung from negative Rs.131 crore to positive Rs.292 crore. Volume growth was strong at 10% for the quarter and 11% for the year, but value growth was flat due to price pressure from online competition and inventory clearance. E-commerce grew 40%, backpacks grew 23% in Q4, and the company closed 133 underperforming stores (404 total). Management guided that FY26 will be a 'much better year' with margin improvements visible from Q1 itself, targeting 50% gross margins and a 12-15% EBITDA range (acknowledging structural change from the historical 17-18%).
Positive for shareholders - management is signaling the worst is behind, with concrete plans to cut another Rs.150 crore in inventory and Rs.125-150 crore in debt in FY26, while reinvesting in branding and premiumization. However, investors should note the candid admission that peak margins (17-18% EBITDA) are structurally behind them, with a new 12-15% EBITDA range likely the new normal.