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« Gulf Investors Still Positive towards Indian Market | Home | Rich Indians Eyeing Singapore Property Market »

India bulls Real Estate Optimistic about Retail Growth in India

Indiabulls Retail (64% owned by IBREL) shut four Megastores and 20 Megamarts in the previous quarter that brought stores under operation to four Megastores and 20 Megamarts, respectively. Results for Q2FY09 for retail operations were consequently muted with revenue increasing only 2.3% sequentially to Rs421 million. EBITDA margins continued to decline and were lower by approximately 600bps sequentially as the company focused on clearing existing inventory. We have maintained that acquisition of Piramyd Retail, which had one of the highest operating cost structures in the industry, was ambitious. We view the steps taken to cut retail losses positively impacting the outlook for IBREL shareholders.

The company continues to remain optimistic about retail growth in India and plans to infuse approximately Rs10 billion over next two years. With real estate prices anticipated to come down, we expect the cost structure to be more favorable for retail expansion. However, we still do not expect the company to achieve EBITDA breakeven before FY11.

News Published Under:   Real Estate India | No Comments »

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