Big bull Rakesh Jhunjhunwala to become even richer - Reason is this stock

After the period of correction in last year, Rakesh Jhunjhunwala’s portfolio are now seeing some revivals. However, according to a TrendLyne.com data, Jhunjhunwala so far in 1 year, has witnessed gains massively from one stock which is a renowned luggage maker. As per the data, VIP Industries which makes luggage in brands like Skybags, Caprese, ALFA, etc. has been a top performer in Jhunjhunwala’s portfolio, rising by a whopping 46% in last 1 year, followed by the ace investor’s favorite stock Titan which has given nearly 25% return. But the gains of VIP does not end here, as the company is set to make the Dalal Street king further richer by nearly 17% ahead. If you are also planning to buy stocks on exchanges, then here’s why VIP Industries can be a good bet. 

According to Kotak Securities, here’s how VIP Industries major luggage brand are performing. 

Skybags: It continues to do very well for the company and is now the largest luggage and backpack brand in the country. VIP claims to have more than 50% market-share in the backpack market with Skybags.

Aristocrat: Aristocrat is the value brand of the company which saw an extremely good year and was the fastest growing brand. As per the management, there is a huge scope in the value segment of the market and the company is well poised to capture the same in value segment. VIP is also focusing on Aristocrat to face competition.

VIP: The brand still enjoys a healthy market share and is on top of the mind brand when it comes to family travel. Management is focusing on reinventing the brand through campaigns. 

Premium Brands: Caprese and Carlton are high-margin brands and continue to grow well, though they are still a small proportion of revenues.  

However, Amit Agarwal analysts at Kotak Securities revealed that, VIP Industries share price has declined by 15% in the past two months on the back unfavorable macro developments including depreciation of rupee, higher crude prices and weak Q3FY19 performance. 

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But this price correction as per Agarwal makes a buying opportunity in VIP. He says, “ We believe this correction offers another opportunity to invest in the stock which has been reporting strong quarterly performance on a sustained basis (except Q3FY19). Performance across brands (Aristocrat, Skybags, VIP and Carlton) and across channels remains strong for the company.”

Thereby, Agarwal adds, “. We continue to have a positive view on the stock with healthy overall volume growth and high brand recall. Maintain BUY with an unchanged target price of Rs 515 at 39x FY20 earnings.”

At around 1355 hours, VIP share price is trading at Rs 440.75 per piece up by 1.22% on BSE. However, the stock has jumped by nearly 3% on Monday, after clocking intraday high of Rs 447.70 per piece on the index during early hours of opening. From this current price level and taking into consideration price target, VIP’s further growth stands nearly 17% in nearterm.

Coming back to Jhunjhunwala, he holds 3.69% stake in VIP with 5,215,000 equity shares worth Rs 226.2 crore. Hence, one can expect with VIP’s uptrend - the big bull will see fruitful gains.