Indian Retail sector has emerged as one of the most dynamic and fast paced sectors. There are various reasons behind the sector witnessing traction. The macro factors like population benefits, policy support and better lifestyle scenario on account of rapid urbanisation are few of those. Apart from that from being an unorganised sector to high amount of consolidation happening in the sector – only suggests that there has been speedier growth happening in the Indian retail sector. Following chart clearly suggests how the Indian retail is expected to grow. From USD 883 billion the Indian retail sector is likely to grow up to USD 1300 billion in FY24.
Just to put the numbers in perspective, India is the world’s fifth-largest global destination in the retail space and ranked 63 in World Bank’s Doing Business 2020. As stated earlier, India is the world’s fifth largest global destination in the retail space and in terms of FDI Confidence Index, India is ranked 16 which is only behind few developed nations. The Indian retail trading has received Foreign Direct Investment (FDI) equity inflow totalling USD 3.44 billion during April 2000-December 2020, according to Department for Promotion of Industry and Internal Trade (DPIIT). While we have already mentioned about the FDI received in India, a lot of consolidation has been witnessed in the space. With large online retailers buying smaller ones the industry is going through a phase of consolidation. As regards the growth prospects of the online retail and Indian Ecommerce business, following charts clearly indicate the growth prospects.
As far as the growth drivers are considered, there has been a lot of policy support coming from the Government. Increased level of FDI (100 percent in single brand retail and 51 percent in multi-brand retail) was one of the stepping stones for the whole Indian retail sector.
A lot of retail merger and acquisitions activity occurred in the Indian retail space. And the Larger one like Reliance and Future Group. Naturally the entry of Amazon in the deal made the deal getting into legal issues. Reliance acquired Future Group’s business for a purchase consideration of around Rs 24,713 crore. We believe the Grocery retail segment where the M&A traction would be more visible. The Tata Group showing interest in Big Basket and Amazon fighting For the Future Group indicates that the larger companies are showing interest in Indian retail sector.
While we have mentioned Grocery retail there are apparel retail companies in the top ten list of the companies. One factor that emerges is, while the leaders have made a good up-move on the bourses, a few like Future group stock have been stuck in a range. However despite the underperformance on the bourses those companies have got good market capitalisation to feature in the list of top ten players.
We have taken out the list of the Indian Retail players based on the market capitalisation of those companies. We believe that while the number of stores, sales per sq. ft. and the same store sales Growth are few of the parameters to analyse the retail sector companies, ultimately it is the growth in market cap that shows the investor interest in the same.
The above table indicates that there is a large gap between the top player and the other players. Avenue Supermarts that runs the departmental stores under the brand name D Mart, is the largest player and the next player is Trent (running the retail chain ‘Westside’) having a market cap almost 85 percent less than the top player. Apart from this, there is a lot of gap on the financial performance part as well. A few of the companies are making losses as well. Let’s take a look at the top ten players. Also provided are the sales and PAT numbers for FY21 in the form of a chart.
Avenue Supermarts that runs the Chain D-Mart has performed very well on the bourses. Since its listing when the IPO was priced at just Rs 300 per share, it has witnessed enormous upside and is now trading at 11x of the issue price. This is considered as very strong returns on the back of the fact that the market capitalisation now Stands at Rs 2,25,976 crore. For a large company witnessing such growth is a remarkable act. As regards the number of stores, it has 238 stores as on June 30, 2021. It is planning to take the total number of stores to 264 in FY22.
As regards the financial performance, the topline for FY21 stood at Rs 24,143 crore and the PAT was Rs 1,099 crore. The 52 week high is Rs 3533 made on July 27, 2021 and the 52 week low is Rs 1954 made on October 19, 2020.
Trent which runs the stores like Westside and Zudio stores stands on the second number. Just to put the numbers in perspective – with 170 Westside and 101 studios, Trent has got a very Strong reach in niche and even in the value fashion segment. The company has got a market Cap of Rs 32,929 crore and posted a sales of Rs 2593 crore in FY21. With decline in topline as compared to FY20 the bottomline in FY21 was affected and it posted a loss of Rs 146 crore. However the segment as a whole is expected to witness growth post Covid and hence seems to be placed well on the bourses. The 52 week High for the company was Rs 947 made on July 8, 2021 and the 52 week low of Rs 542 was made on July 29, 2020.
ABFRL has been another growth Story over the past few years. While the company has 435 own retail stores it has a total retail network of 2385 Stores. While slower store addition has been an issue for the company, it has got an investors fancy. With many brands like Louis Philippe, Van Heusen, Allen Soley and Peter England it has got a good market reach. The company enjoys a market Cap of Rs 20,181 crore and Topline of Rs 5,169 crore in FY21. The PAT for FY21 was negative with the company posting a loss of Rs 673 crore. As regards the 52 week high of Rs 231.65 was made on July 14, 2021. The 52 week low of Rs 117 was made on August 12, 2020.
Vaibhav Global has a very strong retail network in terms of e-commerce web sites for fashion jewellery and lifestyle products in the USA and United Kingdom. The company enjoys a market Cap of Rs 13,056 crore and posted a sales of Rs 2540 crore in FY21. The PAT for FY21 stood at Rs 272 crore. The 52 week High for the scrip was Rs 1050 made on May 10, 2021. The 52 week low was Rs 262 made on July 28, 2020.
Market Cap Rs 6674 crore I 52 week High Rs 3611 on July 13, 2021 I 52 week Low Rs 1710 (August 11, 2020)
Market Cap Rs 3248 crore I 52 week High Rs 167.90 on Sept 1, 2021 I 52 week Low Rs 40.50 (April 1, 2021)
Market Cap Rs 2,649 crore I 52 week High Rs 270 on Jun 6, 2021 I 52 week Low Rs 148 (July 29, 2020)
Market Cap Rs 1707 crore I 52 week High Rs 1418 on July 28, 2021 I 52 week Low Rs 24.70 (Sept 18, 2020)
Market Cap Rs 1400 crore I 52 week High Rs 160.40 on Sept 1, 2020 I 52 week Low Rs 46.50 (April 1, 2021)
Market Cap Rs 1127 crore I 52 week High Rs 1032 on Jan 5, 2021 I 52 week Low Rs 669 (July 31, 2020)
While the retail Sector has been growing fast, the leaders are taking away the larger pie. The consolidation is the buzz word and hence the larger players are expected to become further larger. Online retail and Grocery segments are expected to witness more traction and investors fancy.
We're Live on WhatsApp! Join our channel for market insights & updates
Enjoy ₹0 Account Opening Charges
Join our 2 Cr+ happy customers
Get the link to download the App
