India's largest luggage company, VIP Industries, said that Goods and Services Tax (GST) has helped the company in a huge way.
In an interview to CNBC-TV18's Mangalam Maloo, Dilip Piramal, chairman and managing director, said, "Our aim is to get back to 12 percent margin mark. VIP will do that, but it might take some time. During the last and the current quarter, the rupee had depreciated very sharply against the dollar. More than 50 percent of our sales are from the imported product and the import duty went up by five percent. So, that was a very sharp increase in our input price and other expenses also went up. Since the sales growth was so high, we did not take any significant price increases."
"Last year. we took roughly about five percent price increase in tranches, but the rupee depreciation was far more than that. In the coming quarters, a couple of price increases will be there. Also, we have negotiated very hard on our costs through our suppliers and that has also helped us," said Sudip Ghose, chief executive officer, to CNBC-TV18.
Radhika Piramal, vice chairperson and executive director, said, "The strength and the weakness of VIP somewhat paradoxically is the same. Every consumer in India has an association, their own mental map of what VIP means. One of the challenges of changing such heritage or iconic brand, is people have their own opinions of what VIP is. The most natural fit for VIP is actually family holidays as this is where people have their happy association and memories of VIP. So, that is really where we wanted to focus VIPs new image on."