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Registers growth after 7 quarters

We expect VIP IN to report loss of INR1,871mn/INR69mn in FY27E/FY28E respectively as we fine tune our GM, employee and freight cost assumptions. After 7 quarters, VIP IN’s topline registered a growth of 3.0% YoY to INR5,784mn (PLe INR5,670mn). Margin performance was steady in an inflationary environment with an adjusted GM of 39.3% (PLe 38.5%) for 1QFY27. Backed by new launches and renewed focus on brand building (revamped website, influencer campaigns and outdoor ads), we expect a topline CAGR of 9% over FY26-FY28E. However, the timeline of path to profitability remains uncertain given stiff competition and rise of D2C brands. We expect GM to be at 42.5%/46.0% in FY27E/FY28E respectively and an EBITDA margin of 8.1% in FY28E (anticipate EBITDA loss of INR157mn in FY27E). As the business is undergoing transformation and earnings volatility is likely to remain high due to rising competition and RM inflation, we value the stock at 1.75x FY28E sales (SII IN trades at an EV of 3.0x/2.6x on our FY27E/FY28E sales estimates). Maintain ‘SELL’ on the stock with TP of INR246.

Top-line increases 3.0% YoY:

Top line increased 3.0% YoY to INR5,784mn (PLe INR5,670mn) led by 80+ new launches. Gross profit decreased 5.1% YoY to INR2,397mn with margin of 41.4% However, adjusting for write back in inventory provision of INR123mn, GM declined 570bps YoY to 39.3% (PLe of 38.5%).

Loss for the quarter stood at INR536mn (PLe loss INR126mn) as compared to a loss of INR131mn in 1QFY26. VIP IN has concluded sale of certain non-core assets for ~INR512mn in July’26.

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