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Retail
ƒ Revenue growth to remain moderate…
We expect our retail coverage universe (except Titan) to report topline
growth in the range of 7-13% on the back of some revival in consumer
sentiment and the festive season. Retailers are expected to report double
digit same store sales growth (SSSG). We expect Future Retail (FRL) to
witness SSSG of 10% and Shoppers Stop (SSL) to report SSSG of 14%
and 8% in the departmental and HyperCity segments, respectively. Titan
is likely to witness 8% revenue de-growth due to the absence of the
golden harvest scheme, which had seen early redemption by customers
in the September quarter due to regulatory changes.
ƒ Marginal improvement in operational performance
All retailers in our coverage (except Bata) are likely to report an
improvement in EBITDA margin. While SSL and FRL will gain from
healthy SSSG, SSL is also expected to gain from lower losses in
HyperCity. Titan is likely to see an improvement in margin on account of
lower discounts and benefits of international hedging. However, Bata is
likely to witness margin compression on account of higher sales and
promotion expenses.
ƒ Space addition to stay muted
We expect FRL and SSL to add 0.7 and 0.3 million (mn) sq ft (YoY) taking
the total operational space to 11 and 5.7 mn sq ft, respectively. While
FRL could witness a decline in revenue per sq ft (| 2,337), SSL could
witness an increase of 6.6% to | 2,135.
5: Company specific view (Retail)
Company Remarks
Bata India Revenues are likely to increase 7.2% YoY (| 593.7 crore) led by a marginal improvement in
consumer sentiments and the festive season. We expect operating margin to decline 320
bps due to higher promotional expenses. Consequently, PAT growth may remain muted at
4.9% to | 55.4 crore
Future
Retail
We expect revenues to increase 13.2% to | 2577.3 crore led by SSSG of 10% with space
addition remaining muted. Gross margins are likely to expand 130 bps YoY to 28.05% while
EBITDA margin is expected to expand 50 bps YoY to 10.5%. We expect FRL to report a
loss of | 6.3 crore due to high interest cost
Shoppers
Stop
SSSG of 14% and 8% in Departmental and HyperCity format, respectively, is likely to drive
revenue growth of 12% YoY to | 1223 crore. The operating margin is expected to increase
to 5.1% in Q3FY15E (3.8% - Q3FY14) led by EBITDA level breakeven in the HyperCity
format. We expect a PAT of | 2.0 crore
Titan
Company
Revenues are likely to de-grow 8% YoY to | 2,438 crore due to 15% YoY decline in
jewellery revenues owing to absence of golden harvest scheme. EBITDA margin may
improve 50 bps to 9.8% due to lower discounts and benefit of international hedging.
Consequently, PAT is likely to increase 3% YoY to | 171 crore
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Retail
ƒ Revenue growth to remain moderate…
We expect our retail coverage universe (except Titan) to report topline
growth in the range of 7-13% on the back of some revival in consumer
sentiment and the festive season. Retailers are expected to report double
digit same store sales growth (SSSG). We expect Future Retail (FRL) to
witness SSSG of 10% and Shoppers Stop (SSL) to report SSSG of 14%
and 8% in the departmental and HyperCity segments, respectively. Titan
is likely to witness 8% revenue de-growth due to the absence of the
golden harvest scheme, which had seen early redemption by customers
in the September quarter due to regulatory changes.
ƒ Marginal improvement in operational performance
All retailers in our coverage (except Bata) are likely to report an
improvement in EBITDA margin. While SSL and FRL will gain from
healthy SSSG, SSL is also expected to gain from lower losses in
HyperCity. Titan is likely to see an improvement in margin on account of
lower discounts and benefits of international hedging. However, Bata is
likely to witness margin compression on account of higher sales and
promotion expenses.
ƒ Space addition to stay muted
We expect FRL and SSL to add 0.7 and 0.3 million (mn) sq ft (YoY) taking
the total operational space to 11 and 5.7 mn sq ft, respectively. While
FRL could witness a decline in revenue per sq ft (| 2,337), SSL could
witness an increase of 6.6% to | 2,135.
5: Company specific view (Retail)
Company Remarks
Bata India Revenues are likely to increase 7.2% YoY (| 593.7 crore) led by a marginal improvement in
consumer sentiments and the festive season. We expect operating margin to decline 320
bps due to higher promotional expenses. Consequently, PAT growth may remain muted at
4.9% to | 55.4 crore
Future
Retail
We expect revenues to increase 13.2% to | 2577.3 crore led by SSSG of 10% with space
addition remaining muted. Gross margins are likely to expand 130 bps YoY to 28.05% while
EBITDA margin is expected to expand 50 bps YoY to 10.5%. We expect FRL to report a
loss of | 6.3 crore due to high interest cost
Shoppers
Stop
SSSG of 14% and 8% in Departmental and HyperCity format, respectively, is likely to drive
revenue growth of 12% YoY to | 1223 crore. The operating margin is expected to increase
to 5.1% in Q3FY15E (3.8% - Q3FY14) led by EBITDA level breakeven in the HyperCity
format. We expect a PAT of | 2.0 crore
Titan
Company
Revenues are likely to de-grow 8% YoY to | 2,438 crore due to 15% YoY decline in
jewellery revenues owing to absence of golden harvest scheme. EBITDA margin may
improve 50 bps to 9.8% due to lower discounts and benefit of international hedging.
Consequently, PAT is likely to increase 3% YoY to | 171 crore
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
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