Future Retail, Future Consumer, Future Lifestyle hit record highs

The acquisition is expected to help the Future Group to strengthen its presence in south India

Shares of Kishore Biyani – led Future Group companies are on a roll with Future Lifestyle Fashions (up 8% at Rs 389), Future Consumer Products (up 8% at Rs 48) and Future Retail (up 5% at Rs 512) hitting their respective lifetime highs on the BSE.

Future Enterprises, which, hit its 52-week high of Rs 44, rallied 6% in intra-day trade on Wednesday. At 11:25 am, the S&P BSE Sensex was up 0.47% at 31,440 points.

All these stocks become multi-baggers and have rallied between 120% and 295% in the calendar year 2017 so far, against 18% rise in the benchmark index. The combined market capitalisation of listed Future Group companies increased over three times from Rs 12,646 crore to Rs 40,998 crore.

Future Group’s flagship companies focus on three distinct businesses – hypermarkets business operated by Future Retail, an integrated lifestyle fashion business operated by Future Lifestyle Fashion, an FMCG and food distribution business operated by the Future Consumer Enterprise and infrastructure and backend services operated by Future Enterprises.

Future Retail, the top gainer among these pack, has rallied 293% in 2017, so far. In past three weeks, the stock rallied 29% after the company reported an over two-fold jump in its standalone net profit at Rs 148 crore for the quarter ended June 2017 (Q1FY18) on account of higher income. It posted a net profit of Rs 71 crore during the April-June quarter of the previous fiscal.

Net sales grew 18% year on year to Rs 4,705 crore led by overall SSSG (Same Store Sales Growth) growth of 11.8%, with Big Bazaar posting 15.9% SSSG in 1QFY18.

“Future Retail will witness the next level of re-rating led by expansion in RoE (return on equity) to above 20% and consistent generation of free cash flow. The company’s RoE has improved to 17% led by demerging of retail assets during FY17. The next level of RoE expansion will be led by accelerated growth in earnings better inventory turns and increased focus on convenience store formats,” analyst at Antique Stock Broking said result review.

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