VIP Inds

The stock yesterday tanked down sharply after it declared a net loss for Q2FY13. Seasonally, Q2 is always the weakest yet this time around, it was streaked in red with a  net loss at Rs.1.8 crore compared to Rs.11 crore net profit in Q2FY12. Two reasons for this – firstly the company posted a 6% (YoY) drop in net sales at Rs.161 crore and secondly, on this lower sales, operating expenses rose much higher and thus pushed the company into the red.

In this quarter, because the rupee had appreciated, the company could show a forex gain of Rs.1.8 crore but in current Q3, rupee has depreciated more than appreciated which could have a telling effect in the numbers. The big worry in the company is its forex spend; it imports its soft luggage and given the volatility of the rupee, it remains a worry. Second half is expected to be better yet one cannot expect the stock price to zoom up any time soon.