[T.S.R:18401] VIP Ind Sees Competition, Rupee, SlowDown Leading Collapse In Margins

 

Dilip Piramal at the VIP Industries-Concall

 

My main comment for this

quarter is that this has been a most difficult quarter in the last 12 quarters and

we had a great run right up to June 2011. We had nine very good quarters and

then somewhere around September the rupee depreciated very sharply against

the US dollar. Now two thirds of our business is that of soft luggage and more

than 85% of our profits come from soft luggage and this rupee depreciation was

very abrupt and quite sharp. It depreciated by nearly 25% in the four months

September to December and this last quarter had the full impact and got the

entire front of the depreciated rupee and that is the main reason for our

profitability going down. Fortunately in January the trend has reversed quite a

bit and the dollar has abated by about 60% of the increase and now it is against

the peak of Rs.54 the rupees now hovering around Rs.49. So that is the big

relief. Of course it is not at the 46 levels but at 48 rupees to a dollar we are

very comfortable and the last quarter also from the economic front also was a

bit slow. The sentiment was not very good and that is why rate the growth had

come down but that also seems to be better now. January was a very good

month. So all in all things are not as bad they are quite all right actually and

demand is good. So we look forward to good year next year also. I do not think

the profitability will be as high the rate of profitability. Profit will be as high what

you had last year or at least from the Q1 of last year but it should be all right.

Market strength is quite good and that is the more important thing.

 

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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