VIP Industries share declined 4 per cent to hit an intraday low of Rs 349.60 after the company reported weaker-than-expected earnings for the quarter ended March 2021.
The company reported a consolidated net loss of Rs 3.78 crore for Q4 FY21 compared to a net profit of Rs 9.52 crore for the corresponding quarter of the previous year.
Revenue from operations declined to Rs 243 crore in the March quarter against Rs 316 crore a year ago. The company informed that Q4 revenue was impacted due to COVID-19.
The share opened 3 per cent lower at Rs 355.00 against the previous close of Rs 366.10. The share has gained 69 per cent in the last 12 months.
VIP share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages. Market cap of the firm fell to Rs 5,153.84 crore.
"Overall expense is down by 29% as compared to last year Q4 (Rs.103 Cr vs. Rs.146 Cr in last year Q4). Reduction in employee cost is low in Q4 as last year Q4 has a reversal of Rs. 13 cr on account of reversal of Director's commission and variable pay of management staff," the company said.
"We have cut our FY23 sales/EBITDA estimate by 32%/53% as we anticipate the second wave of Covid-19 to affect H1FY22 sales severely. We also cut our FY23 sales/EBTIDA/EPS forecasts by 13%/13%/6%," IDBI Capital said.
"We now value the stock at a PER of 38x FY23 EPS (34x earlier) to derive a target price of Rs 359 (earlier Rs 344) and maintain our 'HOLD' rating, it added.
The brokerage house also noted that the company's profitability was weaker than the forecast and market share loss also remains a concern.
As per the shareholding pattern for March 2021, Rekha Jhunjhunwala's stake fell to 2.32 per cent in the company against 5.32 per cent in the December 2020 quarter. Rakesh Jhunjhunwala held 22.85 lakh shares and 52.15 lakh shares, a total of 75 lakh shares or 5.31 per cent stake, through two accounts in the December 2020 quarter.
The company didn't show Rakesh Jhunjhunwala's shareholding as they are only allowed to report the shareholding details of investors holding over 1 per cent stake.
VIP Industries share hit a 52-week high of Rs 421.95 on March 4, 2021. On a year-to-date basis, shares of VIP Industries fell 0.26 % percent on BSE against a nearly 7 percent rise in equity benchmark Sensex.
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