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In Q4, we will get back a good portion of our lost margins: Dilip Piramal, VIP Industries

Our volume growth is more than our sales growth, says VIP Industries chairman.

ET Now|
Feb 11, 2019, 01.57 PM IST
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After GST, we have captured a good amount of market share from the unorganised sector, Dilip Piramal, Chairman, VIP Industries Ltd, tells ET Now.

Edited excerpts:


What a stellar revenue growth it has been despite the festive season being a bit tepid. What has aided this growth for you?

Obviously, the market is good and we are getting a good market share from the unorganised sector. Our share of backpacks and the smaller items is increasing very rapidly. In fact, in this quarter, our volume growth is higher than 28% sales growth. This indicates that the smaller items are growing very fast and after GST, we have captured a good amount of market share from the unorganised sector, particularly in backpacks and other smaller items.

What exactly has been the volume growth? Across different product categories, can you spell out the kind of volume growth we have witnessed in Q3?

I do not have individual figures in various categories because that is fairly complicated. Our volume growth is more than our sales growth. Our volume growth is about 29% and that obviously means that smaller items have grown slightly better. So that is a good indication.

In the quarter gone by, the speed breaker in the form of higher costs seems to have hit your margins. Can you tell us a little bit more about what the rise was that you witnessed? What is the outlook that you are seeing now for your margins going forward?

This is something which I had cautioned you all earlier about. There is a slight speed breaker in this quarter. What has happened is that the rupee has depreciated by 11% as against the corresponding quarter last year and in addition to that, there has been a 5% additional import duty. We import quite a lot of stuff from China and the costs definitely have gone up. All our other expenses have also gone up. Margins are under quite a lot of strain. This trend will continue in the current quarter but in the next quarter we will get back a good portion of our lost margins.

What is your strategy on pricing in light of the input costs movement right now?

We will take some price increase and competition is quite severe, especially at the lower end. One wants to lose market share and everyone is gaining market share from the unorganised sector. I am very confident that once sales are very good, as we have been experiencing in last nine months, the entire year has shown a very strong base.

This makes your base very large and it shows the underlying strength of the economy and of our sector particularly. We are dependent on the tourism sector to a great extent and of course, the general economy and that is growing extremely well. In fact, all modes of travel are increasing like air travel, train travel and even road travel. That gives me a lot of confidence about the future of our business.
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