4/5 Manojit K. 2 years ago on Google
Big
Bazaar
owner
Future
Retail,
India’s
biggest
department
store,
gains
steam
as
Kishore
Biyani
rides
demonetisation
Future
Retail
Ltd.,
India’s
biggest
department
store
chain
that
gained
from
the
government’s
surprise
currency
clampdown,
still
has
room
to
extend
the
rally
that’s
more
than
doubled
its
market
value
this
year.
The
stock
has
surged
128
percent
since
Jan.
1,
beating
returns
from
rivals
such
as
billionaire
Kumar
Mangalam
Birla-controlled
Aditya
Birla
Fashion
and
Retail
Ltd.
and
Tata
group’s
Trent
Ltd.
(Reuters)
Future
Retail
Ltd.,
India’s
biggest
department
store
chain
that
gained
from
the
government’s
surprise
currency
clampdown,
still
has
room
to
extend
the
rally
that’s
more
than
doubled
its
market
value
this
year.
The
shares
of
the
food-to-fashion
retailer
are
set
to
rally
22
percent
in
the
next
12
months,
according
to
the
average
analyst
price
target
compiled
by
Bloomberg.
The
stock
has
surged
128
percent
since
Jan.
1,
beating
returns
from
rivals
such
as
billionaire
Kumar
Mangalam
Birla-controlled
Aditya
Birla
Fashion
and
Retail
Ltd.
and
Tata
group’s
Trent
Ltd.
A
shortage
of
cash
hit
purchases
of
soaps
to
cars
after
Prime
Minister
Narendra
Modi
in
November
junked
high-value
currency
bills,
driving
shoppers
to
large-format
stores
like
Future
Retail
that
accept
credit
cards.
Sales
may
jump
25
percent
this
year
as
the
company
adds
to
its
chain
of
1,000-plus
stores,
India’s
biggest,
Group
Chief
Executive
Officer
Kishore
Biyani
said
in
an
interview.
“Demonetisation
was
one
big
tailwind
in
recent
months
and
the
single
goods-and-services
tax
will
be
the
next
big
push,”
said
Himanshu
Nayyar,
Mumbai-based
analyst
at
Systematix
Shares
&
Stocks
Ltd.,
referring
to
the
sales
tax
regime
that
will
help
retailers
buy
materials
seamlessly
from
across
states
after
it
is
rolled
out
from
July
1.
His
one-year
price
target
of
345
rupees
is
18
percent
higher
than
Monday’s
close.
Investors
are
warming
up
to
India’s
brick-and-mortar
retailers
at
a
time
when
their
online
rivals
face
an
intense
discount
war
and
eroding
valuations.
Shares
of
billionaire
Radhakishan
Damani-owned
Avenue
Supermarts
Ltd.,
which
sells
staples
at
knockdown
rates,
have
more
than
doubled
from
their
IPO
price
in
March.
The
stock
hasn’t
been
added
to
a
popular
index
yet
because
of
its
short
trading
history.
Trent,
which
sells
branded
clothes,
has
advanced
32
percent
since
Jan.
1.
Aditya
Birla
Fashion
has
climbed
26
percent.
Credit
card
spends
at
Future
Retail’s
Big
Bazaar
and
Easy
Day
stores,
which
stock
food
and
household
items,
saw
non-cash
billings
surge
86
percent
in
the
November-March
period,
the
company
said.
The
surprise
currency
recall
was
announced
on
the
night
of
Nov.
8.
“Demonetisation
has
in
fact
helped
us
clock
more
revenue,”
Biyani
said
by
phone.
“We’re
also
looking
to
add
2
million
square
feet
this
financial
year”
that
began
April
1,
he
said.
Future
Retail
swung
to
a
profit
in
the
nine
months
ended
December,
reporting
a
net
income
of
2.45
billion
rupees
($38
million)
versus
a
loss
of
898
million
rupees
in
the
year
earlier
period.
Revenue
jumped
almost
fourfold
to
126
billion
rupees,
according
to
its
website.
The
turnaround
isn’t
just
because
of
Modi’s
currency
policy
change.
In
recent
years,
the
company
has
exited
non-core
businesses
and
hived
off
its
supply
chain
infrastructure
to
a
group
firm
as
part
of
efforts
to
lower
debt.
At
the
same
time,
it
bought
smaller
chains,
including
a
dairy
products
retailer
Heritage
Foods
(India)
Ltd.,
to
expand
in
the
convenience
stores
segment.
This
area
is
expected
grow
43
percent
annually
in
the
next
five
years,
according
to
Mumbai-based
Antique
Stock
Broking
Ltd.