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What’s making news?
DIPP proposal on FDI finally done but with strong riders
The DIPP, which had floated the discussion paper last summer, has reportedly completed its proposal
on FDI in retail. The proposal would need to be cleared through an inter-ministerial consultation before
being placed before the cabinet
The proposal includes a set of riders to be imposed on potential FDI in retail, the key ones being
Upper cap of 51% FDI in multi brand retail with a minimum investment size of US$100m
At least 50% of investment to be in back end infrastructure
Retail stores will only be set up in those states where the state government agrees to allow FDI in retail
Stores to be restricted to cities with a population of 1m or more; subsequent news articles indicate that this
restriction may be tightened further to include only the top six cities
At least 30% of sales should be made to small retailers, either directly or through cash & carry stores
At least 30% of manufactured items procured should be through small and medium enterprises
If implemented, the riders would complicate potential FDI investments into existing players
Lifestyle plans ramp up in its India retail business (ET)
New stores to be 20-30% bigger in size and space than existing ones
The company plans to increase Lifestyle stores to 45 over two years from 28 currently
The company had revenues of nearly ~Rs20bn in FY11, of which Rs16bn came from Lifestyle stores
Joyallukas to invest Rs4.25bn on store expansion (ET)
The company plans to open 14 new stores over two years against 22 stores currently
Each new store will be 80,000sft (currently 40,000sft average) and require Rs0.7-0.8bn of investment
What’s making news?
Pizza Hut to intensify focus on home delivery (Mint)
The company plans to open 300 stores in its home delivery focused sub-format by 2015, targeting over
US$100m of revenue from the delivery segment
Currently Pizza Hut operates 145 of the standard format outlets and 35 delivery only outlets
M&S to open more stores, focus on local sourcing (ET/BL)
M&S plans to open 10 stores in India over the next year against 19 currently
The company plans to increase local sourcing to 70% over two years against 52% currently
The store expansion will take the format into tier II cities like Amritsar and Ludhiana
Nielsen study shows modern retail outgrowing traditional stores (ET)
Since 2006, sales in local kirana stores have grown at low single digit growth rates (1-6%)
In the same period, modern trade has growth in strong double digits (13-34%), albeit on a low base
More than 37% consumers now visit an organised retail store every month (30% last year)
Carrefour plans to offer online shopping in India (ET)
The French retailer is building an IT platform that will allow its customers to place orders online
The platform should be operation by 3QCY11 and may be extended to members outside NCR as well
Carrefour currently has one cash and carry store in Delhi (NCR) and plans to add a couple more in
northern India
Retail rentals
YoY trends are now positive for nearly all major markets
Rental hardening has been stronger on the main street
than in malls
QoQ trend largely flat in most markets
Whilst the pipeline for FY12 is healthy, mall supply beyond
that is reportedly drying up
Khan Market in Delhi has the highest rentals in India
(Rs1100/psf), followed by Linking Road (Rs685) in Mumbai
and Connaught Place (Rs600), also in Delhi
Titan Industries
Jewellery
Gold volumes grew last year. Grammage/bill increased ~15%
Diamond prices are up 50-60% over six months. Studded jewellery contributed 28% in FY11 but has come under
pressure due to the steep rise in prices. Diamonds form 10% of inventory
Excise duty imposed in March is being paid but has not been passed on the consumer yet
50-60% of jewellery sales are in cash. Golden harvest advances stand at Rs5bn, contributed ~15% of sales
Store opening focus is on large format stores. Expect 4-5 such stores this year. Asset turns are better in these stores.
Larger stores are on the company’s books – not franchised
Not focusing on very small cities – even Gold Plus needs 0.5-0.6m population base for the format to work
Most studded jewellery manufacturing is in house now; plain gold is outsourced
Watches
Titan sold 13.5m watches last year. Sonata contributed 6m in volume terms but only 20% of sales.
No signs of a downturn yet. Historically this business has been cyclical and vulnerable to broader consumer trends.
Planning to roll out the Helios format aggressively this year; premium, multibrand format
Eyewear
Planning 80 new stores in FY12; expect the business to break even in FY13
Majority of sales are own label with third party brands only in the premium segment. Lenses are in house.
Availability of skilled staff is a worry. Staff intensive as service time/customer is more than 1 hour.
Others
Cost pressures are high this year.
Planning to open 150-200 stores this year. Overall capex for the year to be Rs1.5-2bn
Jubilant Foods
Historic performance and guidance
FY11 was very strong in topline as well as bottom line terms. Same store sales growth driven by: new product launches;
improved marketing efforts; free publicity from the IPO and continuing operational excellence (measured by Domino’s).
FY12: Same store sales guidance at 20%; plan to open 80 new stores this year in Domino’s and launch Dunkin’ Donuts
Operations and store opening
New stores to be across new and existing cities. Currently 65% of stores are in the top 10 cities. Going forward, 50% iof
new stores opened will be in the top 10 cities.
In new cities, look at opening stores in city centre. Use a radius based on travel time of 10 minutes in peak traffic to
determine customer base. In smaller cities, frequency is initially lower but addressable market is larger.
New stores cost Rs7.5-8m in capex with a targeted payback of under three years
Rentals for new stores as a proportion of sales are higher than the average for existing stores and they take 2-3 years
for margins to match those of older stores
95% of stores are profitable on day 1 of operation
Have only closed two stores in the last six years. Use a variety of locally targeted tools to ramp up performance in
underperforming stores. Often, the problem is with the way the store is managed rather than the location
With the exception of the two airport stores, all stores are company operated with long term leases
Finding and retaining people is a key challenge
Competition: There is enough growth to be had currently so not too worried about competition
Pizza Hut is has higher revenue/store due to a larger format and strong dine-in option (~35% market share in pizza vs
~50% for Domino’s). Their delivery offering is not yet as strong as that of Domino’s.
Dunkin’ Donuts
Not planning to position it as a café. Idea is to create an all day food offering with a high value product offering
In the US, 60% of Dunkin’ sales are beverages while its 70% food in South East Asia
Planning a dine-in + takeaway format with a menu tailored to Indian consumers
Shopper’s Stop
Shopper’s Stop
Positioning remains Sec A and above (top 14% of population)
Store growth: planning to open 6-7 more stores this year (3 in April). Target of 62 stores by FY14
The mall pipeline is drying up. Not getting revenue share deals now but rentals still at manageable levels
Currently present in 18 cities. Plan to add another 6 by FY14. Tier II city ramp up accelerates in the third year
Demand environment: April was a good month but beginning to see some issues in May with volume growth
decelerating. May have been due to the IPL or supply disruption from the excise change in March. Could be a broader
sentiment issue or a reaction to the price hikes (5-8% among mainline brands, 10% in private label) as noticing it more
in the second half of May, when the price hikes took effect
Private label is still a significant contributor: 17% of revenues; 32% of margins
In concessionaires, make sure that the minimum guarantee figure ensures a profit and doesn’t just cover costs. Some
brands use the concessionaire model to promote themselves.
Margins: Margin improvements need to be gross margin led beyond a possible 50-60 bps improvement from falling
rent/sales ratio. Feeling pressure on staff costs due to minimum wage increases in most states.
30-31 stores of the 38 operating currently are profitable
Hypercity
Opened the 10
th
store last month in Bangalore
Malad (Mumbai) store did ~Rs2bn of revenues last year with store level margins of 7%. Targeting Rs2.5bn this year
The format also targets a customer base similar to Shoppers Stop (SEC A or better, top 14%)
General merchandise is a major focus area within the product mix; parts of it high margin
Other businesses
Timezone: cash profit last year; should be profitable this year
Nuance (airport retailing): should hit cash profits this year
Crossword: competition is receding; franchisees doing well; focusing on slightly larger stores to increase assortment
Titan Industries- TTAN IN (SELL)
Business description:
Titan is India's largest manufacturer /retailer of watches (19% FY11
sales) and jewellery (77% FY11 sales)
In the watches segment Titan sells high, mid as well as low end
watches
In jewellery, Tanishq is Titan’s luxury jewellery retail format and
GoldPlus is its new mass market offering
Goldplus (mass market jewellery) portfolio now stable at 29 stores
with no major store additions planned
Eye+ (prescriptive eye-wear) formats are being scaled-up and is now
present in over 40 cities
Precision engineering division is expected to break-even in FY12
Growth drivers
As of March 2011, Titan has over 665 stores spread over 0.8m sf
‘World of Titan’ stores: 311
Fastrack stores: 47
Helios stores: 6
Tanishq stores: 120
Gold Plus stores: 29
Zoya stores: 2
Eye+ stores: 150
Titan above 5 year average PE now
News and updates
Tanishq has opened a 20,000 sq ft flagship store in
Mumbai
Akshay Tiritya sales were reportedly strong this year
despite high gold prices
The company plans to add 150-200 stores in FY12. Capex
is expected to be Rs1.5-2bn
Diamond prices have increased 40-50% over the past 4-6
months
Pantaloon Retail- PF IN (U-PF)
Business description:
Pantaloon is India’s largest retailer and a part of Future group.
Its retail business can be grouped into 3 categories:
Lifestyle retailing: Pantaloon and Central
Value retail: Big Bazaar, Food Bazaar and KB’s fair price
Home retail: Home Town and E-Zone
Non retail businesses of Future group
Post-restructuring, PRIL will be a pure play retail company
Asset management: Real estate and private equity funds
Consumer finance, hotels and logistics
General and life insurance
The restructuring of the financial holdings has run into
regulatory hurdles
PRIL has crossed 14m sf in retail space
PRIL trading well below its 5yr mean PE
News and updates
The company plans to add 0.7m sq ft in 4QFY11
The electronics retailing business is being hived off into a
separate subsidiary. The company is planning a hybrid onlinetraditional format called New Zone
Big Bazaar is undergoing an overhaul with a view to enhance
customer experience
Future Group plans to invest Rs4bn/year for the next two years
to strengthen its supply chain
Shopper’s Stop- SHOP IN (U-PF)
Business description:
Shopper’s Stop operates India’s largest chain of department
stores under the Shopper’s Stop brand
It also has 5 specialty retail formats
Crossword: Books, gifts and music
Mothercare: Mother and baby care
MAC: Cosmetics, Arcelia
Home Stop: Home furnishings
Hypercity: Food, grocery and general merchandize
It has increased its stake in Hypercity and now owns 51%
Current retail space: 2.37m sf across over 100 stores and
another 0.98m sf in Hypercity (9 stores)
News and updates
Valuation below long term average but still high
Price: Rs422
Mkt Cap: US$769m
Avg T/O: US$0.5m
Shoppers Stop has raised garment prices to pass on
the excise duty hike
Hypercity hopes to break even in FY13
Hypercity will be opening in the MARG Junction mall
in Chennai. The company will spend Rs0.4-0.5bn on
new store openings this year
Hypercity expects to reach a target of 35 stores by
FY15
Jubilant Foods – JUBI IN (O-PF)
Business description:
Master franchisee for Domino’s in India. Dunkin’ Donuts added
recently
End market for Domino’s growing at 20%+ with broad growth
and a penetration led shift towards takeaway and chain formats
Rising middle class income, evolving attitudes and a young
population drive this
Its strong brand and retail model generate healthy margins and
return ratios
Store portfolio over the 380 mark
News and updates
Financials
Price: Rs807
Mkt Cap: US$1,153m
Avg T/O: US$25.7m
Jubilant plans to increase its pace of store expansion
to 80 in FY12 against 70-72/year in FY10-11
The company is targeting same store sales growth of
20% in FY12
The rollout of the Dunkin’ Donuts will be gradual with
the first store opening in 4QFY12 and 80-100 stores
over five years
Trent- TRENT IN (NR)
Business description:
Trent is one of India’s leading retailers and is a part of
the Tata group
It operates over 100 stores
Westside (Department stores): 54
Star Bazaar (Hypermarket stores): 11
Landmark (Books and gifts stores): 31
Fashion Yatra
It has two JVs –one with Inditex, to open Zara stores,
and another with Tesco, to open cash and carry stores
and also to be the supply chain and logistics partner
to Star India Bazaar
Other highlights
As of FY11, Trent’s floor space was at c.2m sf
We expect it to cross 3m sf of floor space by FY13
The management intends to scale up to 50 Star
Bazaar (Hypermarket stores) over the next three
years
The company will focus on increasing the private label
mix within Star Bazaar
News and updates
Trent has reported Philip Auld as its CEO. Mr. Auld has
held senior positions with Asda and M&S before this
Trent plans to double the number of Star Bazaar outlets
to 20 in 2011
The company is planning to expand the Westside format
in tier II and III cities
Trent is experimenting with gourmet retailing in its
Westside format
Reliance Retail- Unlisted
Business description:
Reliance Retail is 91.1% subsidiary of Reliance Industries
Ltd.
It operates over 1,000 stores across 86 cities across 14
states
Other formats: Mart, Super, Digital, Trendz, Footprint,
Wellness, iStore, Footprint, Jewellery, TimeOut,
bookstore, AutoZone
Currently there are c.5.5m ‘RelianceOne’ members under
its flagship loyalty programme
News and updates
Relliance Retail plans to enter cash & carry with stores
of 100-150k sft each. The company may open the first
such store in Ahmedabad.
Reliance Brands is reportedly in talks with LVMH
owned beauty retailer Sephora for its India launch
The company plans to increase the number of Reliance
Trends stores to 150 by Mar’12 from 36 currently
Reliance will come up with 3000-4000 new stores over
the next 3-4 years across all 19 of its formats
Bharti Wal-Mart- Unlisted
Business description:
Wal-Mart and Bharti Enterprises formed a 50:50 JV to foray
into the wholesale cash and carry business under Bharti
Wal-Mart Private Limited
In addition, Bharti has also opened retail stores, the supply
chain for which is supported by Bharti Wal-Mart
Currently, Bharti has a total of 118 stores, including Easy
Day stores and Easy Day Market stores, in Punjab,
Haryana, UP, Rajasthan, among others.
Bharti plans to increase its store portfolio to about 140
stores by the year end; Bharti Wal-Mart has recently
opened its third cash and carry store
The company plans to open 15 wholesale cash and carry
stores by the end of CY 2011
Details of Bharti Enterprise’s retail venture
News and updates
Bharti Walmart plans to open eight more cash and carry stores
in 2011 (6 currently) with another 8 in 2012
The company is planning to extend its cash & carry offering to
the Western and Southern markets
The company hopes to have 12 cash & carry stores by the end
of 2011, employing nearly 15,000 people
Aditya Birla Retail- Unlisted
Business description:
In January 2007, Aditya Birla group announced plans
to enter the retail sector with the acquisition of south
India based Trinethra Super Retail
Trinethra group operated 170 stores across 0.5m sf
retailing food and grocery in Andhra Pradesh, Kerala,
Karnataka and Tamil Nadu
Retail franchise:
Currently: 560 More supermarket store and ten
hypermarket stores totalling over 1.7mn sq ft
Store size: Super markets average 2,500-3000 sf
and hypermarket stores 55,000 sf
ABRLs merchandise mix is 15% fresh food, fruits
& vegetables, 50% grocery food & staples, 25-
30% FMCG and 5-10% general merchandise
Its loyalty program ‘Clubmore’ has 2.6m
customers, of which 0.4m are currently active
News and updates
Aditya Birla Retail’s growth plans are focused on South
India for supermarkets but pan-India for the
hypermarkets format
The company plans to have 1600 supermarkets and
65 hypermarkets by 2016
The company expects to break even at the PAT level
by FY15 and Ebitda level by FY13
ABRL has recently opened its second hypermarket in
Delhi (60k sq ft store)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s making news?
DIPP proposal on FDI finally done but with strong riders
The DIPP, which had floated the discussion paper last summer, has reportedly completed its proposal
on FDI in retail. The proposal would need to be cleared through an inter-ministerial consultation before
being placed before the cabinet
The proposal includes a set of riders to be imposed on potential FDI in retail, the key ones being
Upper cap of 51% FDI in multi brand retail with a minimum investment size of US$100m
At least 50% of investment to be in back end infrastructure
Retail stores will only be set up in those states where the state government agrees to allow FDI in retail
Stores to be restricted to cities with a population of 1m or more; subsequent news articles indicate that this
restriction may be tightened further to include only the top six cities
At least 30% of sales should be made to small retailers, either directly or through cash & carry stores
At least 30% of manufactured items procured should be through small and medium enterprises
If implemented, the riders would complicate potential FDI investments into existing players
Lifestyle plans ramp up in its India retail business (ET)
New stores to be 20-30% bigger in size and space than existing ones
The company plans to increase Lifestyle stores to 45 over two years from 28 currently
The company had revenues of nearly ~Rs20bn in FY11, of which Rs16bn came from Lifestyle stores
Joyallukas to invest Rs4.25bn on store expansion (ET)
The company plans to open 14 new stores over two years against 22 stores currently
Each new store will be 80,000sft (currently 40,000sft average) and require Rs0.7-0.8bn of investment
What’s making news?
Pizza Hut to intensify focus on home delivery (Mint)
The company plans to open 300 stores in its home delivery focused sub-format by 2015, targeting over
US$100m of revenue from the delivery segment
Currently Pizza Hut operates 145 of the standard format outlets and 35 delivery only outlets
M&S to open more stores, focus on local sourcing (ET/BL)
M&S plans to open 10 stores in India over the next year against 19 currently
The company plans to increase local sourcing to 70% over two years against 52% currently
The store expansion will take the format into tier II cities like Amritsar and Ludhiana
Nielsen study shows modern retail outgrowing traditional stores (ET)
Since 2006, sales in local kirana stores have grown at low single digit growth rates (1-6%)
In the same period, modern trade has growth in strong double digits (13-34%), albeit on a low base
More than 37% consumers now visit an organised retail store every month (30% last year)
Carrefour plans to offer online shopping in India (ET)
The French retailer is building an IT platform that will allow its customers to place orders online
The platform should be operation by 3QCY11 and may be extended to members outside NCR as well
Carrefour currently has one cash and carry store in Delhi (NCR) and plans to add a couple more in
northern India
Retail rentals
YoY trends are now positive for nearly all major markets
Rental hardening has been stronger on the main street
than in malls
QoQ trend largely flat in most markets
Whilst the pipeline for FY12 is healthy, mall supply beyond
that is reportedly drying up
Khan Market in Delhi has the highest rentals in India
(Rs1100/psf), followed by Linking Road (Rs685) in Mumbai
and Connaught Place (Rs600), also in Delhi
Titan Industries
Jewellery
Gold volumes grew last year. Grammage/bill increased ~15%
Diamond prices are up 50-60% over six months. Studded jewellery contributed 28% in FY11 but has come under
pressure due to the steep rise in prices. Diamonds form 10% of inventory
Excise duty imposed in March is being paid but has not been passed on the consumer yet
50-60% of jewellery sales are in cash. Golden harvest advances stand at Rs5bn, contributed ~15% of sales
Store opening focus is on large format stores. Expect 4-5 such stores this year. Asset turns are better in these stores.
Larger stores are on the company’s books – not franchised
Not focusing on very small cities – even Gold Plus needs 0.5-0.6m population base for the format to work
Most studded jewellery manufacturing is in house now; plain gold is outsourced
Watches
Titan sold 13.5m watches last year. Sonata contributed 6m in volume terms but only 20% of sales.
No signs of a downturn yet. Historically this business has been cyclical and vulnerable to broader consumer trends.
Planning to roll out the Helios format aggressively this year; premium, multibrand format
Eyewear
Planning 80 new stores in FY12; expect the business to break even in FY13
Majority of sales are own label with third party brands only in the premium segment. Lenses are in house.
Availability of skilled staff is a worry. Staff intensive as service time/customer is more than 1 hour.
Others
Cost pressures are high this year.
Planning to open 150-200 stores this year. Overall capex for the year to be Rs1.5-2bn
Jubilant Foods
Historic performance and guidance
FY11 was very strong in topline as well as bottom line terms. Same store sales growth driven by: new product launches;
improved marketing efforts; free publicity from the IPO and continuing operational excellence (measured by Domino’s).
FY12: Same store sales guidance at 20%; plan to open 80 new stores this year in Domino’s and launch Dunkin’ Donuts
Operations and store opening
New stores to be across new and existing cities. Currently 65% of stores are in the top 10 cities. Going forward, 50% iof
new stores opened will be in the top 10 cities.
In new cities, look at opening stores in city centre. Use a radius based on travel time of 10 minutes in peak traffic to
determine customer base. In smaller cities, frequency is initially lower but addressable market is larger.
New stores cost Rs7.5-8m in capex with a targeted payback of under three years
Rentals for new stores as a proportion of sales are higher than the average for existing stores and they take 2-3 years
for margins to match those of older stores
95% of stores are profitable on day 1 of operation
Have only closed two stores in the last six years. Use a variety of locally targeted tools to ramp up performance in
underperforming stores. Often, the problem is with the way the store is managed rather than the location
With the exception of the two airport stores, all stores are company operated with long term leases
Finding and retaining people is a key challenge
Competition: There is enough growth to be had currently so not too worried about competition
Pizza Hut is has higher revenue/store due to a larger format and strong dine-in option (~35% market share in pizza vs
~50% for Domino’s). Their delivery offering is not yet as strong as that of Domino’s.
Dunkin’ Donuts
Not planning to position it as a café. Idea is to create an all day food offering with a high value product offering
In the US, 60% of Dunkin’ sales are beverages while its 70% food in South East Asia
Planning a dine-in + takeaway format with a menu tailored to Indian consumers
Shopper’s Stop
Shopper’s Stop
Positioning remains Sec A and above (top 14% of population)
Store growth: planning to open 6-7 more stores this year (3 in April). Target of 62 stores by FY14
The mall pipeline is drying up. Not getting revenue share deals now but rentals still at manageable levels
Currently present in 18 cities. Plan to add another 6 by FY14. Tier II city ramp up accelerates in the third year
Demand environment: April was a good month but beginning to see some issues in May with volume growth
decelerating. May have been due to the IPL or supply disruption from the excise change in March. Could be a broader
sentiment issue or a reaction to the price hikes (5-8% among mainline brands, 10% in private label) as noticing it more
in the second half of May, when the price hikes took effect
Private label is still a significant contributor: 17% of revenues; 32% of margins
In concessionaires, make sure that the minimum guarantee figure ensures a profit and doesn’t just cover costs. Some
brands use the concessionaire model to promote themselves.
Margins: Margin improvements need to be gross margin led beyond a possible 50-60 bps improvement from falling
rent/sales ratio. Feeling pressure on staff costs due to minimum wage increases in most states.
30-31 stores of the 38 operating currently are profitable
Hypercity
Opened the 10
th
store last month in Bangalore
Malad (Mumbai) store did ~Rs2bn of revenues last year with store level margins of 7%. Targeting Rs2.5bn this year
The format also targets a customer base similar to Shoppers Stop (SEC A or better, top 14%)
General merchandise is a major focus area within the product mix; parts of it high margin
Other businesses
Timezone: cash profit last year; should be profitable this year
Nuance (airport retailing): should hit cash profits this year
Crossword: competition is receding; franchisees doing well; focusing on slightly larger stores to increase assortment
Titan Industries- TTAN IN (SELL)
Business description:
Titan is India's largest manufacturer /retailer of watches (19% FY11
sales) and jewellery (77% FY11 sales)
In the watches segment Titan sells high, mid as well as low end
watches
In jewellery, Tanishq is Titan’s luxury jewellery retail format and
GoldPlus is its new mass market offering
Goldplus (mass market jewellery) portfolio now stable at 29 stores
with no major store additions planned
Eye+ (prescriptive eye-wear) formats are being scaled-up and is now
present in over 40 cities
Precision engineering division is expected to break-even in FY12
Growth drivers
As of March 2011, Titan has over 665 stores spread over 0.8m sf
‘World of Titan’ stores: 311
Fastrack stores: 47
Helios stores: 6
Tanishq stores: 120
Gold Plus stores: 29
Zoya stores: 2
Eye+ stores: 150
Titan above 5 year average PE now
News and updates
Tanishq has opened a 20,000 sq ft flagship store in
Mumbai
Akshay Tiritya sales were reportedly strong this year
despite high gold prices
The company plans to add 150-200 stores in FY12. Capex
is expected to be Rs1.5-2bn
Diamond prices have increased 40-50% over the past 4-6
months
Pantaloon Retail- PF IN (U-PF)
Business description:
Pantaloon is India’s largest retailer and a part of Future group.
Its retail business can be grouped into 3 categories:
Lifestyle retailing: Pantaloon and Central
Value retail: Big Bazaar, Food Bazaar and KB’s fair price
Home retail: Home Town and E-Zone
Non retail businesses of Future group
Post-restructuring, PRIL will be a pure play retail company
Asset management: Real estate and private equity funds
Consumer finance, hotels and logistics
General and life insurance
The restructuring of the financial holdings has run into
regulatory hurdles
PRIL has crossed 14m sf in retail space
PRIL trading well below its 5yr mean PE
News and updates
The company plans to add 0.7m sq ft in 4QFY11
The electronics retailing business is being hived off into a
separate subsidiary. The company is planning a hybrid onlinetraditional format called New Zone
Big Bazaar is undergoing an overhaul with a view to enhance
customer experience
Future Group plans to invest Rs4bn/year for the next two years
to strengthen its supply chain
Shopper’s Stop- SHOP IN (U-PF)
Business description:
Shopper’s Stop operates India’s largest chain of department
stores under the Shopper’s Stop brand
It also has 5 specialty retail formats
Crossword: Books, gifts and music
Mothercare: Mother and baby care
MAC: Cosmetics, Arcelia
Home Stop: Home furnishings
Hypercity: Food, grocery and general merchandize
It has increased its stake in Hypercity and now owns 51%
Current retail space: 2.37m sf across over 100 stores and
another 0.98m sf in Hypercity (9 stores)
News and updates
Valuation below long term average but still high
Price: Rs422
Mkt Cap: US$769m
Avg T/O: US$0.5m
Shoppers Stop has raised garment prices to pass on
the excise duty hike
Hypercity hopes to break even in FY13
Hypercity will be opening in the MARG Junction mall
in Chennai. The company will spend Rs0.4-0.5bn on
new store openings this year
Hypercity expects to reach a target of 35 stores by
FY15
Jubilant Foods – JUBI IN (O-PF)
Business description:
Master franchisee for Domino’s in India. Dunkin’ Donuts added
recently
End market for Domino’s growing at 20%+ with broad growth
and a penetration led shift towards takeaway and chain formats
Rising middle class income, evolving attitudes and a young
population drive this
Its strong brand and retail model generate healthy margins and
return ratios
Store portfolio over the 380 mark
News and updates
Financials
Price: Rs807
Mkt Cap: US$1,153m
Avg T/O: US$25.7m
Jubilant plans to increase its pace of store expansion
to 80 in FY12 against 70-72/year in FY10-11
The company is targeting same store sales growth of
20% in FY12
The rollout of the Dunkin’ Donuts will be gradual with
the first store opening in 4QFY12 and 80-100 stores
over five years
Trent- TRENT IN (NR)
Business description:
Trent is one of India’s leading retailers and is a part of
the Tata group
It operates over 100 stores
Westside (Department stores): 54
Star Bazaar (Hypermarket stores): 11
Landmark (Books and gifts stores): 31
Fashion Yatra
It has two JVs –one with Inditex, to open Zara stores,
and another with Tesco, to open cash and carry stores
and also to be the supply chain and logistics partner
to Star India Bazaar
Other highlights
As of FY11, Trent’s floor space was at c.2m sf
We expect it to cross 3m sf of floor space by FY13
The management intends to scale up to 50 Star
Bazaar (Hypermarket stores) over the next three
years
The company will focus on increasing the private label
mix within Star Bazaar
News and updates
Trent has reported Philip Auld as its CEO. Mr. Auld has
held senior positions with Asda and M&S before this
Trent plans to double the number of Star Bazaar outlets
to 20 in 2011
The company is planning to expand the Westside format
in tier II and III cities
Trent is experimenting with gourmet retailing in its
Westside format
Reliance Retail- Unlisted
Business description:
Reliance Retail is 91.1% subsidiary of Reliance Industries
Ltd.
It operates over 1,000 stores across 86 cities across 14
states
Other formats: Mart, Super, Digital, Trendz, Footprint,
Wellness, iStore, Footprint, Jewellery, TimeOut,
bookstore, AutoZone
Currently there are c.5.5m ‘RelianceOne’ members under
its flagship loyalty programme
News and updates
Relliance Retail plans to enter cash & carry with stores
of 100-150k sft each. The company may open the first
such store in Ahmedabad.
Reliance Brands is reportedly in talks with LVMH
owned beauty retailer Sephora for its India launch
The company plans to increase the number of Reliance
Trends stores to 150 by Mar’12 from 36 currently
Reliance will come up with 3000-4000 new stores over
the next 3-4 years across all 19 of its formats
Bharti Wal-Mart- Unlisted
Business description:
Wal-Mart and Bharti Enterprises formed a 50:50 JV to foray
into the wholesale cash and carry business under Bharti
Wal-Mart Private Limited
In addition, Bharti has also opened retail stores, the supply
chain for which is supported by Bharti Wal-Mart
Currently, Bharti has a total of 118 stores, including Easy
Day stores and Easy Day Market stores, in Punjab,
Haryana, UP, Rajasthan, among others.
Bharti plans to increase its store portfolio to about 140
stores by the year end; Bharti Wal-Mart has recently
opened its third cash and carry store
The company plans to open 15 wholesale cash and carry
stores by the end of CY 2011
Details of Bharti Enterprise’s retail venture
News and updates
Bharti Walmart plans to open eight more cash and carry stores
in 2011 (6 currently) with another 8 in 2012
The company is planning to extend its cash & carry offering to
the Western and Southern markets
The company hopes to have 12 cash & carry stores by the end
of 2011, employing nearly 15,000 people
Aditya Birla Retail- Unlisted
Business description:
In January 2007, Aditya Birla group announced plans
to enter the retail sector with the acquisition of south
India based Trinethra Super Retail
Trinethra group operated 170 stores across 0.5m sf
retailing food and grocery in Andhra Pradesh, Kerala,
Karnataka and Tamil Nadu
Retail franchise:
Currently: 560 More supermarket store and ten
hypermarket stores totalling over 1.7mn sq ft
Store size: Super markets average 2,500-3000 sf
and hypermarket stores 55,000 sf
ABRLs merchandise mix is 15% fresh food, fruits
& vegetables, 50% grocery food & staples, 25-
30% FMCG and 5-10% general merchandise
Its loyalty program ‘Clubmore’ has 2.6m
customers, of which 0.4m are currently active
News and updates
Aditya Birla Retail’s growth plans are focused on South
India for supermarkets but pan-India for the
hypermarkets format
The company plans to have 1600 supermarkets and
65 hypermarkets by 2016
The company expects to break even at the PAT level
by FY15 and Ebitda level by FY13
ABRL has recently opened its second hypermarket in
Delhi (60k sq ft store)
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