Up to 9,500% returns in 10 years, these 2 stocks can still take you on a trip to Thailand

Both companies have delivered solid growth in December quarter profits.

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Safari Industries and VIP Industries — two listed luggage makers that have delivered up to 9,500 per cent return in last 10 years— still have room to grow and can deliver up to 20 per cent, say analysts.
Are roaming the beaches of Pattaya and sampling street food in Bangkok part of your dreams? If you have the patience to wait for a year, an investment in two multibaggers of Dalal Street can fund your escapades.

Safari Industries and VIP Industries — two listed luggage makers that have delivered up to 9,500 per cent return in last 10 years— still have room to grow and can deliver up to 20 per cent, say analysts.

It means an investment of Rs 1 lakh today in either of these stocks may fund airfare from Mumbai (to and fro Bangkok: Rs 13,000) plus lodgings cost for you in Thailand, that too without eating into your invested capital.


Both companies have delivered solid growth in December quarter profits. Safari Industries reported a standalone profit of Rs 9.14 crore, a jump of 84 per cent. Its larger peer registered a consolidated profit growth of 44 per cent to Rs 34.21 crore in the same period.

Brokerages are bullish on the luggage sector as the competitive advantage has now tilted in favour of organised players. Further, millennials aspiration for travel driven by social media influence, adventure seeking, and eye for experience also presents a huge opportunity for the Indian luggage players.

Axis Securities has ‘buy’ ratings on both stocks.
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It has a target at Rs 755 for Safari Industries, meaning a potential upside of nearly 20 per cent. The stock has gained 9,438 per cent in last 10 years.

“Its superior product features offering aesthetic appeal, storage, and tech aided features will continue to drive growth helping it target market share gains of 100-200bps on an annual basis,” said Axis Securities.

Similarly, the brokerage has a target price of Rs 554 for VIP Industries. It justified the stock's premium valuation given its leadership position and balance sheet strength. The brokerage expects VIP to report 24 per cent PAT growth CAGR over FY19-22 aided by growth across its brands viz. Skybags, VIP, Caprese and Carlton.

VIP Industries, thanks to its fast growing business and thus the stock price, has multiplied investor’s wealth over 10 times in the last decade.
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“Given the fact that VIP enjoys a very high return on equity of 25 per cent, I think this is clearly a stock that can really do very well going ahead. Our target is Rs 575 with a one year timeframe,” said Ashish Kapur, CEO, Invest Shoppe India.

He said thanks to the rollout of GST and other initiatives, the industry is set to move towards branded players and in that VIP Industries has a clear advantage.
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However, recently concerns have been raised over VIP's almost flat top line growth. The management has clarified that this has been due to greater focus on maintaining the margin.

“There is a lot of competition, a lot of orders are being taken at very low prices and particularly institutional orders. So, these are very large orders and are not part of the regular trade. We have a choice whether to take that order at that particular price and in many cases, we have decided that we do not want to take those orders,” said Dilip Piramal, chairman, VIP Industries in an interaction with ET Now.

The company reported margin at 15.7 per cent for the quarter gone by, much higher than 8.8 per cent for the same period last year. SPARK Capital has an add rating on the scrip with target at Rs 520.
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