Retailers see top line growth on low base in January-March quarter

Aditya Birla Fashion and Retail (ABFRL), Trent, Shoppers Stop, Titan and Avenue Supermarts saw strong revenue growth in the quarter

Sharleen Dsouza Mumbai
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Retailers see strong top line growth in the January-March quarter due to impacted sales in the base quarter due to the Omicron wave coupled with strong store openings. 
Aditya Birla Fashion and Retail (ABFRL), Trent, Shoppers Stop, Titan and Avenue Supermarts saw strong revenue growth in the quarter. 

In its earnings release, Noel N Tata, chairman at Trent said, “Our lifestyle offerings across concepts, categories and channels are witnessing a strong momentum. We see growing relevance for our offerings, resilience of our business model choices and attractiveness of our differentiated platform.” 
He added, “In the foregoing backdrop, we are continuing to expand the reach of all our concepts with the aim of being ever-more proximate and convenient to our customers. We are in the initial laps of our growth. I see much potential, led by our passionate teams, to address significant opportunities that lie ahead.”

The company’s fashion and lifestyle chain, Westside witnessed a like-for-like growth of 23 per cent compared to the same quarter last year, but the company also said that last year’s quarter was impacted due to Covid. 
ABFRL also witnessed a 26 per cent rise in net sales at Rs 2,880 crore in the January-March quarter as it focused on expanding its network of stores. 

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Jagdish Bajaj, Chief financial officer told investors post announcing its results, “The quarter saw the highest ever Q4 revenue for the company at both stand-alone and consolidated level, which was driven by strong retail Like-to-Like, omnichannel play, and network expansion.” 
He added that the company saw this growth in the quarter despite the overall industry continued to face subdued demand post festive period, especially in value and masstige segments. 

Also in FY23, the retailer added more than 500 stores and also added 1.6 million square feet of retail space to the network.
However, Kotak Institutional Equities has trimmed its margin estimates due to higher investments in new business and higher marketing spends. The brokerage also said, “We do not see the company emerging from its investment phase anytime soon, a risky strategy given its inflated debt situation.” 

Shoe retailer, Bata India also saw its revenue increase in double-digit by 17 per cent in Q4 to Rs 779 crore and Motilal Oswal said in its report that it witnessed a topline growth due to a weak base coupled with price increases as well as footprint expansion. 
The brokerage also noted that Bata India witnessed soft volume growth as the below Rs 1,000 segment is still witnessing weakness. 

“Weakness in volumes, pressure from the value segment (below Rs 1,000 average selling price category), and limited incremental price hike possibilities in FY24 estimate may put pressure on the performance, but moderation in raw material prices and inflation could drive gradual recovery,” the brokerage said. 
Avenue Supermarts  which runs supermarket chain DMART also saw a 20.6 percent increase in net sales and also added the highest number of stores in FY23 since FY18. 

It added 324 stores in the previous financial year. ICICI Securities said in its report that Avenue Supermarts same store (>2-year-old stores) revenue performance in
The second half of FY23 at 11 per cent is underwhelming. “This was largely impacted by continued underperformance in general merchandise and apparel which also negatively impacted the margin mix,” ICICI Securities said in its report on the company.

It also pointed out that according to its channel checks, in the apparel segment (~50 per cent share of retail area in general merchandise and apparel), the company is facing strong competition from specialist retailers like Zudio, Max etc. 
Even Centrum pointed out that DMART's general merchandise & apparel segment continues to underperform other segments. Its sales contribution at 23 per cent is still well below FY19 levels of 28.3 per cent. 

Titan Company also saw its revenue increase 26.8 per cent to Rs 9,215 crore and also witnessed one of the best Akshay Tritiya sales this year. 
However, Ajay Chawla, CEO of the jewellery division pointed out that due to the volatility in gold prices, demand was impacted in March which continued in the first half of April as well. 

First Published: May 24 2023 | 11:49 PM IST

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