Future Retail has managed to meet street expectations and has posted a decent set of Q4 earnings.
In an interview to CNBC-TV18, Rakesh Biyani, Joint MD of the company spoke about the results and his outlook for the company.
Below is the verbatim transcript of the interview.
Surabhi: Your EBITDA managed to grow about 48 percent, there was margin expansion of about 25 percent growth on the topline, can you walk us through some of the factors that were active during the quarter and how you are seeing this year play out?
A: The results have been quite consistent over the last three quarters. This is more to do with all the work that we have been doing over the last two years and optimising our inventory, optimising our supply chain. A lot of this is due to the significant amount of data utilisation that we are doing from our likely data base. So the connect with the consumer is becoming stronger and not only has the margin improved but the growth in sales and specifically the same-store sales growth (SSSG), the like-to-like growth has been continuing to be strong for the last three quarters in a row now.
Surabhi: Can you give us the SSSG number?
A: For Big Bazaar it has been 15.3 percent. That is what the SSSG has been. That is the same number that we have been getting for the last three quarters now in a row. I think the business has evolved quite well and has become lot more consistent and that is the reason we are registering a significant amount of growth in the EBITDA that we have been able to deliver.
Reema: Your inventory has been optimised to 80 days in FY17 versus 85 days in FY16 and secondly your working capital too has come down by 30-35 percent as of March, on both these parameters because earlier there were a concern with the analysts, if you could give us some guidance for FY18 on working capital debt as well as your inventory days?
A: The key lies as to continue the consistent performance in terms of same store sales growth. I think currently the trend is quite similar. So my gut feel is that we would be – as we start utilising more of the data, which is a continuous process, in the coming year, we could definitely land up seeing an improvement similar to what we have been able to deliver in the last 12 months or it could be slightly better also.
It is a clear case for us that we need to optimise our working capital even, there is definite more scope to do this but I think the first focus is ensuring the fact that we continue to maintain our growth – I think the new facility that we have been able to create in Nagpur for our distribution centre is only going to help us ensure the fact that our inventory levels are further optimised.
For full discussion, watch video...
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