Expect demand to rise in H2; Q3 should see festive boost: V-Mart

Anuj: Your income went up 11 percent but profit was down because of low margin. What went wrong?

A: We are witnessing lower demand in smaller towns primarily in the semi urban belt, so our same-store-sales dipped and have not been stable, so it bad than what we expected. However, I think that is more of a factor of last two years monsoon, lower demand and lower consumption level. So that is a core item because the major costs are going up.

Latha: In that case what was your same-store-sales growth amount? How many stores did you add?

A: The same-store-sales growth was negative by 4 percent and we added almost 5 store in this particular quarter. So as of now we have shown total revenue growth of 11 percent.

Sonia: Earlier you had indicated that you plan to add about 20 stores in this fiscal, in FY17. Given that demand is not picking up, would you want to scale down that plan?

A: Not to scale down but we would like to tap the geographies which are virgin and geographies where not too many organised retail players have come in. So there is demand in multiple geographies but in the similar market where we have been operating, we have not seen rise in demand and that is the only challenge. Therefore, I think it is a question of temporary phenomena where this monsoon looks good and a lot of rain is seen in hinterland primarily. So demand should rise in Diwali quarter.

Sonia: How many stores you can add by the end of FY17?

A: We are still on the same track of planning around 20 stores and we have finalised six-seven locations which we want to open before Diwali. So we will target around five locations in last quarter.

Anuj: In FY16 your profit went down from FY15 and FY17 hasn't started on good note. Will FY17 be worse than FY16 or will it be better than FY16?

A: We are expecting a lot from Q3 because of good monsoons. The festival days should be much better than what we are seeing today and even marriage season seems good during the last quarter and Q4. So, a lot of demand will rise in the coming year.

Latha: You couldn't get any lower rents or improve margins because of that?

A: As far as the property market is concerned, in smaller towns we already are at low rentals; our average rental is around Rs 29 per square feet. So we are targeting similar kind of rentals in such towns. However, we haven't received any lower rentals post this.