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Retail
Same store sales growth and promotional offers to boost topline
Same store sales growth (SSSG) has picked up in the last three or
four quarters and companies are reporting double digit SSSG (~15-
20%). Consumer sentiment continued to remain positive and
discretionary spends continued despite higher inflation. We expect
our retail universe to post 36% growth on the back of buoyant
demand. Pantaloon Retail is likely to see traction in the March
quarter sales on the back of ‘Sabse Saste 5 Din Sale’ and the ‘The
Great Exchange Offer’ that fell during the quarter. Shoppers Stop
also had a month long sale in February, thereby aiding topline
growth.
Margin pressure for Pantaloon Retail, Shoppers Stop
We expect marginal pressure on the operating margin of Pantaloon
Retail and Shoppers Stop on the back of rising input costs and also
loss making business (Hometown and HyperCity, respectively).
However, for Titan, we expect a 180 bps margin expansion to 9.8%
on the back of increased share of studded jewellery and launch of
premium products in the watches segment.
Space addition to fuel future growth
Retailers have regained confidence in the economic revival and have
started to resume their expansion plans albeit more cautiously. We
expect PRIL to add 0.5 mn sq ft to take its total retail space to 14.67
mn sq ft while Shoppers Stop is likely to have added 0.4 mn sq ft in
the quarter taking its total retail space to 3.6 mn sq ft.
Company specific view
Company Remarks
Pantaloon
Retail
As per our estimates, PRIL is likely to add 0.5 mn sq ft of space this quarter. We expect
39% topline growth on the back of space addition and ~16% SSSG. Operating margins
are likely to be sub 9% owing to operating losses of the home solutions business
Shoppers
Stop
We expect space addition of 0.4 mn sq ft and topline growth of 12% sequentially during
Q4FY11E. We expect revenues of | 2,239/sq ft (departmental stores) backed by healthy
SSSG. The EBITDA margin is likely to be maintained at ~6% despite an increase in
apparel costs due to the price hike taken by the company
Titan
Industries
We expect healthy topline growth in Q4FY11E on the back of strong growth in both the
jewellery (13% value growth) and watches (27% value growth) segment. On the EBITDA
margin front, we see 180 bps expansion YoY on the back of increased share of diamond
jewellery and launch of premium watches
Source: Company, ICICIdirect.com Research
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Retail
Same store sales growth and promotional offers to boost topline
Same store sales growth (SSSG) has picked up in the last three or
four quarters and companies are reporting double digit SSSG (~15-
20%). Consumer sentiment continued to remain positive and
discretionary spends continued despite higher inflation. We expect
our retail universe to post 36% growth on the back of buoyant
demand. Pantaloon Retail is likely to see traction in the March
quarter sales on the back of ‘Sabse Saste 5 Din Sale’ and the ‘The
Great Exchange Offer’ that fell during the quarter. Shoppers Stop
also had a month long sale in February, thereby aiding topline
growth.
Margin pressure for Pantaloon Retail, Shoppers Stop
We expect marginal pressure on the operating margin of Pantaloon
Retail and Shoppers Stop on the back of rising input costs and also
loss making business (Hometown and HyperCity, respectively).
However, for Titan, we expect a 180 bps margin expansion to 9.8%
on the back of increased share of studded jewellery and launch of
premium products in the watches segment.
Space addition to fuel future growth
Retailers have regained confidence in the economic revival and have
started to resume their expansion plans albeit more cautiously. We
expect PRIL to add 0.5 mn sq ft to take its total retail space to 14.67
mn sq ft while Shoppers Stop is likely to have added 0.4 mn sq ft in
the quarter taking its total retail space to 3.6 mn sq ft.
Company specific view
Company Remarks
Pantaloon
Retail
As per our estimates, PRIL is likely to add 0.5 mn sq ft of space this quarter. We expect
39% topline growth on the back of space addition and ~16% SSSG. Operating margins
are likely to be sub 9% owing to operating losses of the home solutions business
Shoppers
Stop
We expect space addition of 0.4 mn sq ft and topline growth of 12% sequentially during
Q4FY11E. We expect revenues of | 2,239/sq ft (departmental stores) backed by healthy
SSSG. The EBITDA margin is likely to be maintained at ~6% despite an increase in
apparel costs due to the price hike taken by the company
Titan
Industries
We expect healthy topline growth in Q4FY11E on the back of strong growth in both the
jewellery (13% value growth) and watches (27% value growth) segment. On the EBITDA
margin front, we see 180 bps expansion YoY on the back of increased share of diamond
jewellery and launch of premium watches
Source: Company, ICICIdirect.com Research
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