Retailing share price target

Marred by store closures and several lockdown restrictions, the retail sector was among the worst hit in CY20. After a washout in Q1FY21, gradual opening of stores and surge in pent up demand translated into a sustained improvement in recovery rates. The revenue recovery trajectory improved from a mere 25% in July to ~70% in October. Online/e-commerce sales were the key catalyst in revenue recovery (~1.5x of pre-Covid sales) wherein share to overall sales has more than doubled (earlier ~5%). As per our channel checks, festive season demand has been healthy and the...

acquisition valued at Rs245bn will increase grocery business sales by ~40% to scale up its JIO Mart business meaningfully. Future Group shareholders will get shares in FEL (Future Enterprises), however we believe that huge equity dilution (12.26bn shares) post scheme of arrangement will result in significant pressure on stock price given that FEL had just Rs4.3bn EBIDTA in FY20 (post arrangement basis). Our target price on Reliance post factoring in expected gains from this acquisition increase from Rs2170 to Rs2234 (SOTP based). We retain BUY on Reliance Industries. Although we don't rule...

In women western wear, men wear and kids wear: unique brand positioning and value pricing to help Trent win market share We note that as a private label retailer, Trent has been able to establish unique brand positioning through disciplined approach of controlling entire value chain similar to Zara, M&S; and H&M.; In women western wear Westside's overall product offering (ASP of Rs1633, 20-25% cheaper than top 10 brands) is concentrated in the price range of Rs 1000-1500 (52% SKUs) which faces moderate competitive intensity (with 248 brands) compared to price range of Rs 1500-2000 where we see over-crowding of 321 distinct...

Click here to: Asiamoney Brokers Poll 2019 Q1FY20 appears to be a mixed performance for retail and we expect our coverage universe to post revenue/EBITDA/PAT growth of 13%/12%/17% (vs. 14%/10%/5% in Q4FY19). However, EBITDA will not be comparable due to accounting changes (IND AS). Titan's jewellery growth is likely to be slower due to high gold prices and subdued demand however stable jewellery margins should drive 18% earnings growth. JUBI's SSSG is expected to be weak due to high discounting by food aggregators and high comparables. Within the apparel space, we expect FLFL and ABFRL to outperform with healthy sales...

Brent crude oil price increased for the second month consecutively by 2% MoM to average US$80.5/bbl in Oct'18 mainly driven by weaker sentiments ahead of the economic sanctions on Iran by US. However, OPEC production increased by 1.5% MoM to 33.3mbpd on the back of higher production from Libya and Saudi Arabia. Non-OPEC production also grew by 1.7% MoM to 59.8mbpd for the month of Sept'18 led by North Sea, Asia and Brazil. US Crude oil inventory stood at 419mn bbls in Oct'18 on lower demand. US refinery utilization declined further by 4.7% MoM in Oct'18 to 89.1%. Also, Singapore Gross refining margin (GRM) declined by 13% MoM to US$5.2/bbl in Oct'18 mainly led by lower crack spreads from Gasoline and Naphtha, partially offset by stronger gasoil and FO crack spreads. Gross Marketing margin have improved by nearly Rs1.3/ltr on petrol and Rs0.8/ltr on diesel from the lows of early Oct'18. Arab Light-Heavy differential improved as much as 20% MoM to US$2.5/bbl whereas INR depreciated further and made a new record high of Rs73.6/US$ in Oct'18. On Natural Gas space, LNG prices have softened after three months by 9% MoM to US$10.2/mmbtu owing to lower demand across countries like China, Japan, US and India. We...

As CMIE Capex releases Q2FY18 numbers, the data portends a gloomy outlook. Further, the nominal increasing value of projects outstanding is contributed by a) variation in cost (+6% Y/Y); and b)a drop in project shelved (-21% Y/Y). To be sure, the aggregate value of projects added, CMIE reckons, ticks below ~Rs1trn. On a yearly base, from a relative lens, this was down more than twothirds. This by no measure is a number to cheer. And even among this flagging number, a substantial chunk is contributed by the Uttar Pradesh state government. Strip the impact of Rs200bn from Taj International Airport project Phase-II and III of Uttar Pradesh, the days could...

The overall Q3 performance has been reasonable, but there were divergent trends - subdued performance of the discretionary sector, while auto, cement and consumer staples were not impacted as severely as earlier thought

We hosted a conference call with MD of Gujarat Cooperative Milk Marketing Federation Ltd. (Amul), Mr. Rupinder Singh Sodhi to understand the emerging trends, challenges & opportunities in dairy industry. The key takeaways of the call are:...