India’s largest luggage-maker, VIP Industries, which is in the middle of a major restructuring and clean-up exercise under new management, is finding the road to revival difficult. The company, founded in 1971 by Dilip Piramal and now chaired by Renuka Ramnath as non-executive chairperson, continued to report weak performance in Q4 FY26 as its losses widened to Rs 128.80 crore from Rs 32.63 crore in the March quarter of FY25 due to high provisions and falling sales. The company reported provisions of nearly Rs 130 crore in FY26 to clean up slow-moving and obsolete inventory.
The company’s revenue fell 14% in FY26 to Rs 1,858 crore from Rs 2,178 crore in FY25. Its consolidated net loss widened sharply to Rs 338 crore in FY26 from Rs 68.8 crore in FY25. Cash and cash equivalents also declined to Rs 31.71 crore from Rs 37.96 crore a year earlier, while total equity dropped sharply to Rs 289.5 crore from Rs 616 crore due to continued losses.
However, there are signs of improvement. The luggage maker reduced its overall debt to Rs 410.75 crore in FY26 from Rs 415.25 crore in FY25, while net debt declined to Rs 295 crore from Rs 367 crore last year. Analysts expect debt levels in FY27 to remain broadly stable.
With stock-keeping units (SKUs) reduced by 25-30% during the year, thereby lowering inventory maintenance costs, and debt levels expected to remain under control, the company is hoping to revive the brand in the current financial year.
For decades, VIP Industries dominated India’s luggage market. However, in recent years, the company has seen its market share erode rapidly amid growing competition from rivals such as Samsonite and Safari Industries, as well as digital-first brands like Mokobara. According to the company’s FY25 investor presentation, VIP’s market share declined from 40% in 2021 to 35% by March 2025, while Safari and Samsonite narrowed the gap with market shares of 32% and 33%, respectively.
Back story
The Piramal family built VIP Industries over nearly six decades. However, in the second half of 2025, Dilip Piramal sold a 32% controlling stake in the company to private equity firm Multiples Alternate Asset Management. The PE fund, along with Mithun Sacheti, subsequently acquired another 26% stake from public shareholders in a deal valued at Rs 1,763 crore.
The ownership change followed a prolonged slowdown in the company’s performance. For several years, the company’s day-to-day operations were led by Radhika Piramal, who joined the business in 2010 at the age of 31. At the time, the company’s market share had already declined to just over 50%, from nearly 80% in the 1990s.
During her tenure, Radhika introduced several strategic changes. She relaunched the Skybags brand with vibrant designs aimed at younger consumers and introduced Caprese, a premium women’s handbag brand, in 2012. Caprese went on to generate Rs 100 crore in sales by 2018.
However, after Radhika stepped down in 2017, the company struggled to maintain momentum, allowing competitors such as Safari and Samsonite to gain ground. The company also misread changing consumer preferences. As demand shifted towards durable hard luggage, VIP continued to stock large volumes of soft luggage across its outlets and warehouses.
Atul Jain, the current managing director appointed after Multiples acquired the company, acknowledged this strategic misstep. “The company did not fully sense the growing demand for hard luggage at the time, and our outlets and warehouses were largely filled with soft luggage,” he said recently.
When contacted by TNIE, VIP Industries declined to speak on the matter.
Leadership churn added to the challenges. Sudip Ghose (2019–21) and Anindya Dutta (2021–23) exited the company in quick succession, creating uncertainty. Following their departures, then chief financial officer Neetu Kashiramka served as managing director until November 2025.
One of the company’s major fault lines — high inventory levels — has also started easing. Inventory levels declined from Rs 698 crore in FY25 to Rs 472 crore in Q4 FY26, indicating efforts to improve operational efficiency.
During the Q4 FY25 earnings call, Kashiramka acknowledged pressure on profitability. She said, “Profitability was definitely a challenge during the year, mainly gross margin, which was impacted by downward pressure on selling prices, inventory provisions, and netting off of price support for e-commerce channels.”
The current management believes the company’s decline was sharp and that the recovery, too, will take time. It acknowledged that VIP was carrying bloated inventories of finished goods and raw materials worth nearly Rs 700 crore until September 2025. Channel partners were saddled with slow-moving designs sold at deep discounts without pricing discipline, while weak distributor communication and supply-chain inefficiencies further hurt the business.
Another drag on profitability was the Bangladesh manufacturing facility, which remained under-utilised and loss-making for a prolonged period. The company is now increasing its focus on production from Bangladesh as exports from the neighbouring country are cheaper, while its Nashik facility is already operating at near-full capacity.
The company’s sales have been declining for the past two years, though its investor presentation shows that it has managed to arrest de-growth in offline sales to some extent. VIP Industries’ revenue fell from Rs 994 crore in the first half of FY26 to Rs 884 crore in the second half, marking a decline of 10%.
The luggage maker claims it has curtailed de-growth in offline sales, reporting a lower decline in H2 FY26 compared with H1 FY26. The company is now aiming to contain the slowdown in online sales as well. In the first half of FY26, offline revenue fell to Rs 750 crore, while in the second half it declined further to Rs 725 crore, according to a report by PL Capital.
Revival strategy
As part of its revival strategy, VIP is stepping up marketing and brand visibility. Skybags has become the official luggage partner of the Chennai Super Kings, a move aimed at connecting with younger consumers.
The company is also focusing on premium products and expanding its presence across online and offline channels. Its manufacturing plant in Nashik produces around 7.5 lakh units per month and is currently operating close to full capacity. The company is also betting on the backpack segment, where nearly 70% of the market continues to be dominated by unorganised players.
With its Bangladesh manufacturing unit reporting EBITDA of Rs 9 crore and its contribution to overall sales rising to 22.6% in Q4 FY26 from 16.5% in Q3 FY26, the luggage maker now has a stronger base to accelerate growth, provided it continues to introduce attractive products and refresh designs regularly.
In a recent note, brokerage house Motilal Oswal Financial Services said it expects VIP to gain market share and deliver industry-beating growth, supported by product upgrades featuring innovations such as the Smart Bag-Tag, rationalisation of low-return stores, and a turnaround in the Bangladesh plant.
Elara Capital, in a recent note, said margin pressures for the company have peaked and that it sees recovery ahead. The brokerage has given a “Buy” rating on the stock with a target price of Rs 361 against the last traded price of Rs 302. The stock has gained more than 8% in the last five trading sessions.
The company will also have to chalk out a new strategy after losing the right to sell Carlton bags in India from June 1, following a January 2026 Supreme Court judgment that allowed it to continue sales for four months. Rival Safari Industries signed a 20-year licensing agreement with Carlton Retail Pvt Ltd in February.
With mounting losses, sharp inventory correction and rising competition from peers, VIP Industries faces a long and difficult road to recovery, requiring sustained operational improvements and sharper execution in the coming quarters.