VIP Clothing (VIPCLOTHNG)
TurnaroundScore breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹20.14 |
| Market Cap | ₹181.52 Cr |
| P/E Ratio | 18.82 |
| ROCE | 6.21% |
| ROE | 4.53% |
| Dividend Yield | 0% |
| Profit Growth | -16% |
| Debt/Equity | 0.36 |
| Sales Growth | -0.9% |
| Promoter Holding | 46.55% |
| 52-Week Range | ₹14.05 — ₹41.2 |
| Sector | Textiles & Apparels |
| Book Value | ₹21.12 |
Strengths
- Debt/Equity is moderate at 0.40, so the balance sheet is not highly leveraged
- P/B of 1.28 and book value of ₹18.64 provide some asset backing near the current price
- Promoter holding of 46.55% shows reasonable promoter interest
- Latest quarter still generates a small net profit of ₹1 crore, so operations are not loss-making
Concerns
- Sales declined 18.92% and profit declined 53.50%, showing severe business deterioration
- Piotroski F-Score of 3/9 indicates weak financial health and poor operational efficiency
- ROE of 4.53% and ROCE of 6.21% are far below what a quality compounding business should earn
- P/E of 23.07 with zero dividend offers no margin of safety for shrinking earnings
AI Analysis
At ₹23.92, VIP Clothing trades at 23 times earnings even as profits have fallen 53.5% and sales have dropped 18.9%. That is a deadly combination for a value investor. The Piotroski F-Score of 3/9 confirms what the growth numbers already tell me: this is a business under real stress. The company earns just 4.53% on equity and 6.21% on capital, and the latest quarter shows the problem clearly: ₹51 crore of sales produced only ₹1 crore of net profit, a roughly 2% margin. A garments company in a fiercely competitive industry rarely has a durable moat, and here there is no evidence of pricing power or brand strength. The debt-to-equity ratio of 0.40 is acceptable, and the stock is not terribly expensive at 1.28 times book value of ₹18.64. But that is small comfort when earnings are shrinking and no dividend is paid. Promoter holding of 46.55% is decent, but it does not compensate for deteriorating fundamentals. Graham would insist on a margin of safety; I don't see one. At 23 times earnings for a declining, low-return business, the downside protection is thin. I would not buy today. I would watch whether the next few quarters show stabilization in sales and profits. Until then, this is a speculative turnaround, not an investment.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer