This is the second largest luggage company in the world and the largest in Asia. So if this company has shown a lackadaisical performance, clearly it means that people are not travelling and this is thanks to the slowdown in the economy. Also this is not exactly the holiday season. More than these reasons, the rupee depreciation is the real cause. The company has quite a substantial import content in its raw material and it also imports some of the soft luggage. This has impacted the bottomline. Net sales for Q1FY14 was at Rs.326 crore, up 8% (YoY). Though raw material cost has risen only 4%, total operating costs have risen 11%. The company’s net profit was at Rs.23 crore as against Rs.23.5 crore in Q1FY13.

The company is hoping that canteen stores segment sales picks up though it would take a while for international sales to get going. Though it managed to post a 12% EBITDA margin in current Q1, going ahead, it is expected to slip to a single digit. Q2 is seasonally not its best and in these circumstances, to expect a better performance would be imprudent. Also one does not know yet how much more the rupee could depreciate so the risks for Q2 remain.