Update | 11 June 2019
Retail
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Steady growth ahead
Prefer TRENT, ABFRL, FLFL and FRL
With 4QFY19 earnings season behind, we assess the quarter gone by in this report,
discussing our channel checks, margin improvement opportunities and our stock
recommendations.
4QFY19 earnings performance of our retail coverage universe was a mixed bag. While
TRENT, FLFL, and FRL performed well, DMART, VMART, and ABFRL witnessed good
revenue growth, but at the cost of margins.
Though 1QFY20 was off to a slow start, our recent channel checks indicate that the
trend has now reversed. May’19 witnessed a bounce-back in growth coupled with
upbeat market sentiments and favorable outlook.
TRENT, ABFRL, FRL, and Shopper’s Stop should see healthy margin improvement due
to increasing scale, mix of private labels and recovery from loss-making formats. But,
margin improvement cycle for DMART, VMART, and FLFL may be largely behind.
We continue to prefer companies with the value fashion format and the food and
grocery (F&G) segment. Amongst these, our top picks are ABFRL, TRENT, FLFL and FRL.
Refer to our thematic report
published in April 2019
4QFY19 review: Healthy revenue growth led by store additions
Despite 4QFY19 being a seasonally weak quarter, all retail companies in our
coverage universe (except SHOP) posted healthy double-digit revenue growth.
Amongst F&G players, DMART/FRETAIL reported robust 32%/18% YoY growth, while
in the Apparel pack, TRENT/FLFL outperformed peers with strong 27%/29% YoY
growth. Across retailers, growth was largely an outcome of the step-up in pace of
store adds, even as SSSG remained modest due to impact from the pre-ponement of
End of Season Sale (EOSS) in 3QFY19. For Apparel players, the pace of store addition
was supplemented by increasing traction for the value fashion format.
Apparel players:
For TRENT, our workings indicate steady 12% SSSG for
Westside, largely driven by footprint addition of 22%/150% YoY in
Westside/Zudio with store count at 152/55. In FLFL, Brand Factory’s healthy
store addition coupled with 13% SSSG (led by strong traction) acted as a key
growth catalyst. For VMART/ Pantaloons, muted 4%/-4% SSSG was more than
offset by 25%/12% footprint adds. Shopper’s Stop witnessed 7% revenue decline
on modest 4% SSSG and no new store adds, that was further impacted by higher
taxes.
F&G players:
FRL/DMART showed healthy revenue growth in 4QFY19 on robust
SSSG (11% for FRL) and store addition — Big Bazaar (6), FBB (5) and small format
store adds for FRL (56) and DMART (12). The strong SSSG was driven by sharp
price undercutting in the recent past by F&G retailers. This is also evident in
FRL/DMART’s gross margins — reset by -20bp/-50bp YoY.
Margins remain under check
Besides revenue growth, focus was increasingly on margins given the rising intense
competition from offline and online players. Except for ABFRL and SHOP, retailers
across our coverage universe reported a drop in gross margins. DMART/VMART
reported 50bp/100bp YoY gross margin contraction, primarily due to price
competitiveness. TRENT/FLFL reported 290bp/60bp contraction, impacted by
Aliasgar Shakir – Research analyst
(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Hafeez Patel – Research analyst
(Hafeez.Patel@motilaloswal.com); +91 22 6129 1568
Investors are advised to refer through important disclosures made at the last page of the Research Report.
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Retail
increasing mix of the value fashion segment. Higher SGA expenses accentuated the
impact on ABFRL/VMART’s EBITDA margins (-280bp/260bp YoY). However, for the
remaining players, the impact was offset by operating leverage benefits. EBITDA
margin for TRENT/FLFL/DMART was largely flat YoY, while it expanded 100bp YoY
(on flat GM) for FRETAIL.
Exhibit 1: Revenue growth across retailers
32.1
28.9
Revenue growth YoY (%)
26.5
18.0
15.9
3.7
9.2
-6.9
Source: MOFSL, Company
Exhibit 2: Format-wise footprint additions (%)
4QFY19 store count
48
12
308
14
176
10
44
93
YoY Footprint addition (%)
66
18
386 1106
0
83
23
156
22
152
25
214
Exhibit 3: Format-wise SSSG (%)
4QFY19 SSSG (%)
6.5
-4.4
13.1
13.6
3.7
12.0
3.5
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 4: Gross margins remained under pressure
Change in gross margin (bp)
53.0
14.4
10
-50
-60
-20
37.5
Exhibit 5: Accentuating the impact on EBITDA margins
Change in EBITDA margin (bp)
6.5
29.0
4QFY19 gross margin (%)
44.1
47.4
21.2
210
-290
-100
4QFY19 EBITDA margin (%)
7.5
140
0.3
130
5.0
30
-260
5.2
7.5
8.9
5.4
100
26.8
490
-280
-30
-10
Source: MOFSL, Company
Source: MOFSL, Company
11 June 2019
2

Retail
Recent channel checks indicate F&G retailers in fierce
price competition
Expect ABFRL’s Pantaloons, lifestyle stores to continue healthy growth
momentum
Despite undercutting, there isn’t much difference in the price comparison between Big
Bazaar and DMART. Also, unlike the general perception that online shopping is cheap,
offline product prices broadly match online prices.
While retailers experienced flat-to-marginal revenue decline YoY in the Feb-Apr 2019
period, the trend saw a reversal with consumer sentiments and revenues rebounding
in May’19.
Pantaloons’ internal target is 80-store addition annually, with on-ground focus on
private labels remaining high in stores. It also offers high revenue/sq.ft., thus
improving store productivity.
Van Heusen/Allen Solly are focusing on brand extensions through Van Heusen’s
women wear category expansion, Solly Junior, Solly Women, among others.
F&G witnessing fierce price battles
The F&G segment has witnessed intense price undercutting by players recently. But,
our checks on the total food and HPC product basket of DMart, Big Bazaar, Star and
select online retailers reveals that the price differential between Big Bazaar and
DMart is less than 5%. Also, the general perception that products online are cheaper
than offline stands corrected. Broadly, offline product pricing matches online
pricing. Therefore, the online medium has limited competitive edge except for the
convenience of ordering from home. In our opinion, this is due to the low 15-20%
gross margin in the F&G segment, which offers limited room to sustain undercutting
(refer exhibit 27).
Apparel retail sales on a rebound
We visited ABFRL’s Pantaloons and lifestyle (Exclusive Brand Outlets, EBOs) stores.
Key highlights:
Pantaloons — high on-ground focus on private labels
Revenue was week in Apr’19, but strongly rebounded in May’19 with 17% MoM
growth. The company is gearing for a good EOSS with membership
program/marketing initiatives starting from Jun’19.
Internally, store addition target stands at 80 annually.
On-ground focus is high to build private label brands (SF, Bare, Byford and Rang
Manch contribute ~30% to revenues).
Menswear brands — Total 16 brands, eight are private brands and four are
lifestyle brands. Bare and SF — top contributors.
Women’s wear brands — Total 10 brands, of which four brands are private
labels. Rang Manch is the top contributor in private labels.
Private labels are leading to higher revenue/sq.ft. (65% sales on ~55% saleable
area), thus increase in private labels should improve overall throughputs.
In the last few years, store productivity has increased by expanding the saleable
area and reducing the backend area in stores.
11 June 2019
3

Retail
Product price points have not changed materially, but company has improved
product quality, brand positioning and increased private label mix.
Store inventory is at about 45 days with 6-7 weeks of replenishment time and
ASP of INR600-700.
Lifestyle portfolio focusing on brand extensions — innerwear, women’s
wear witnessing healthy traction
Company is focused on brand extension and growing its revenue share outside
the men’s formal wear category. It is also developing and marketing women
apparels (thereby, sales contribution has increased from 20% to 25%).
Men’s innerwear is receiving good traction and healthy repeat sales.
Company is looking to expand women's range, consisting of formal, western,
casual wear and bags. In the Allen Solly vertical, recent product extension across
Solly Junior and Solly Women is driving growth. Van Heusen Inner wear is
launched but yet not reached stores across to penetrate across Pan India, with
EBO’s being the 1st channel of distribution yet to see launch across stores.
Planning to launch new low capex stores – plans are afoot to launch new Allen
Solly stores at 20% lower capex – achieved by reducing irrelevant design fixtures
and enhancing usage, without compromising on décor and interiors.
11 June 2019
4

Retail
Margin improvement cycle to play out
TRENT, ABFRL, FRL to see accelerated growth on margin improvement
In the Apparel category, TRENT, ABFRL and Shopper’s Stop are likely to see EBITDA
margin improvement, while VMART and FLFL’s margin should remain range-bound.
In the F&G segment, expect FRL to continue its margin improvement cycle while
DMART may continue to see gross and EBITDA margin reset further in FY20.
Margin improvement to continue for ABFRL, TRENT, SHOP and FRL
Recovery from loss-making ventures, improving private label mix, and growing
business scale should continue margin improvement of ABFRL, TRENT, Shopper’s
Stop and FRL.
ABFRL to see 150bp EBITDA margin improvement over FY19-21E
Overall EBITDA margin should expand ~150bp to 8.3% by FY21 on the back of (a)
break-even in the innerwear and fast-fashion businesses, (b) steady uptick in
Pantaloons’ private label mix (70-75%), and (c) the company’s strategy of
franchisee-led store additions, which should provide an impetus to RoCE.
Pantaloons should see 150bp EBITDA margin improvement due to improving
private label mix and growing scale. Rejig in the fast fashion brand – Forever 21
should breakeven from FY19 losses of INR330m. Further, scale benefits should
restrict losses in the innerwear and other business segment to INR200m (FY21)
v/s INR850m (FY19), thus supporting EBITDA margins.
TRENT to see 90bp EBITDA margin improvement over FY19-21E
Zudio, TRENT’s value fashion segment’s gestation period should be behind with
a healthy scale of 105 stores, including standalone and Star, by FY21. Zudio’s
estimated losses of INR200m should decline, thus supporting its EBITDA margin.
Further, Star too should see lower losses with rejig in its ‘daily’ format and
improvement in private labels. We expect consol. EBITDA margin to improve
~90bp over FY19-21E.
Shopper’s Stop to see 100bp EBITDA margin improvement over FY19-21E
Shopper’s Stop has a new management in place, and it endeavors to improve
private label mix with product/pricing revamp and increase SSSG through higher
bill size initiatives. This is estimated to drive 100bp EBITDA margin improvement
over FY19-21E.
FRL to see 60bp EBITDA margin improvement over FY19-21E
FRL has consistently improved its EBITDA margin over the last two years. This
trend is likely to continue on (a) increasing gross margins through higher mix of
private label and apparel mix, (b) faster break-even of Hypercity, (c) restricted
losses in Easyday, and (d) scale benefits. The recent high competitive intensity in
the F&G space to hold the flag of lowest-cost retailer has increased the risk of
margin pressure. However, FRL’s targeted approach through its private labels
allows it to garner better margin, thus garnering insulation from any margin
contraction.
DMART, VMART, FLFL to see flattish margins over FY19-21E
With no signs of pressure on gross margins abating and to maintain competitive
position in the market, retailers such as DMART and VMART should see margins
11 June 2019
5

Retail
getting reset. DMART is facing pressure on gross margins due to reduced pricing
gap between its offerings vis-à-vis Big Bazaar/online players. Similarly, VMART’s
margins are also under pressure due to national players entering its turf of tier
2/3 cities. Increasing share of Brand Factory in overall FLFL’s mix augurs well;
however, margins would remain range-bound as the inherent nature of the
value fashion format will offset operating leverage benefits. We expect EBITDA
margins for DMART/VMART/FLFL to largely remain flat over FY19-21.
Exhibit 6: Revenue CAGR for F&G players
FY19 Revenue (INR b)
26%
13%
202
200
14%
22
735
57
CAGR FY19-21E
30%
21%
10%
36
26
Exhibit 7: Revenue CAGR for Apparel players
FY19 Revenue (INR b)
18%
13%
CAGR FY19-21E
18%
81
14
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 8: Gross margin for F&G players
FY19 Gross margin (%)
30
-20
26.7
15.0
21.2
CAGR FY19-21E (bp)
50
0
Exhibit 9: Gross margin for Apparel players
FY19 Gross margin (%)
40
0
-10
41.9
50.1
51.6
CAGR FY19-21E (bp)
50
0
13.7
35.6
32.3
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: EBITDA margin for F&G players
FY19 EBITDA margin (%)
140
CAGR FY19-21E (bp)
Exhibit 11: EBITDA margin for Apparel players
FY19 EBITDA margin (%)
100
CAGR FY19-21E (bp)
150
50
90
30
6.9
8.7
6.8
9.3
50
20
8.2
0.4
40
9.2
5.1
7.0
Source: MOFSL, Company
Source: MOFSL, Company
11 June 2019
6

Retail
Continue to prefer value fashion and F&G players
ABFRL, TRENT, FLF and FRL remain top picks
We continue to prefer value fashion as well as F&G players. Amongst these, ABFRL,
TRENT, FLF and FRL remain our top picks.
Tapering earnings growth in DMART/VMART due to margins getting reset may
advocate lower valuation multiples. Further, Shopper’s Stop is yet to deliver healthy
revenue growth, which may restrict valuations.
Strong earnings growth advocates rich valuations
We prefer companies with potential to offer consistent and strong earnings growth,
thus endorsing valuation multiples. While ABFRL and TRENT remain expensively
valued, we expect strong 82%/62% adj. PAT growth due to steady revenue growth
and improving EBITDA margin. Both these companies have efficient working capital
cycle. Subsequently, we maintain a
Buy
rating on ABFRL/TRENT with TP of
INR240/INR440. TRENT’s ROIC remains a point of worry though, but we believe that
Star’s reducing losses and Zudio’s scale benefits should start improving ROICs.
For ABFRL, we ascribe 23x FY21 EBITDA of INR6.4b for the lifestyle segment given its
strong brand value. We expect Pantaloons to drive earnings growth for ABFRL and
ascribe 18x FY21 EBITDA of INR3.7b for this segment. We ascribe 1x FY21 sales for
the fast-fashion and other businesses. This implies ~10% premium to the target
EV/EBITDA multiple for our apparel coverage.
For TRENT, we ascribe (a) Westside and Zara 25x (~20% premium to the target
EV/EBITDA multiple of our apparel coverage) FY21E EBITDA, and (b) THPL 1x FY21E
sales.
FLFL, FRL showing good traction
FLF has delivered consistently healthy revenue growth coming in from Brand
Factory, Central and its own brands. We expect 23% EBITDA CAGR and 30% adj. PAT
CAGR over FY19-21. We maintain
Buy
rating with TP of INR585 ascribing 14x (~10%
premium to 3-year average) EV/EBITDA, given its strong performance over the last
two years.
FRL has consistently improved its EBITDA margin growing 170bp over FY17-19; we
expect it to continue with 50bp improvement over FY19-21. The recently announced
INR20b promoter warrants issue should be utilized in releasing FRL assets from FEL
— a move that will (a) clean FRL’s asset ownership structure, (b) turn EPS accretive,
and (c) garner 12% RoCE with further improvement potential. We maintain our TP of
INR550, ascribing 20x (at 3-year average) FY21E EBITDA of INR15b. FRL trades at
~50% discount to DMART. With growth levers in place and return ratios set to take
off, the valuation gap should reduce, in our view.
11 June 2019
7

Retail
DMART/VMART valuations off the roof with tapering earnings growth
For DMART, we believe the margin reset cycle is yet not fully over; we expect the
next couple of quarters to see margin contraction. Even though FY19-21E PAT CAGR
remains healthy at ~30%, it is nearly half of the 56% PAT CAGR seen over FY15-18.
The stock has corrected about 10% since our coverage, but yet remains rich at a P/E
of 52x on FY21E. We maintain our TP of INR1,125, ascribing 26x EV/EBITDA on FY21E
— a 20% premium to the target multiple of our coverage companies given its strong
execution capability and healthy earnings profile. However, given the risk of
earnings deceleration and rich valuation, maintain
Sell.
Similarly, VMART has also seen strong 46% EBITDA CAGR over FY16-18, but saw flat
EBITDA in FY19. This is partly captured in the ~30% decline witnessed in its stock
price since peak of ~INR3,200 in the last three months. Yet, it trades richly at 21x
EV/EBITDA and 40x P/E in FY21E. While we model 21% EBITDA growth over FY19-21,
valuation is likely to remain under pressure given the probable deceleration in
earnings growth. We maintain
Neutral
with TP of INR2,450, ascribing 22x EV/EBITDA
— a 15% premium to our coverage target multiple.
Exhibit 12: Financial metrics comparison
Company
Rev. (INR b)
CAGR %
EBITDA (INR b)
CAGR % EBITDA margin. % CAGR %
PAT (INR b)
EPS (INR)
CAGR %
FY19 FY20E FY21E FY19-21 FY19 FY20 FY21 FY19-21 FY19 FY20E FY21E FY19-21 FY19 FY20E FY21E FY19 FY20E FY21E FY19-21
ABFRL
DMART
FLFL
FRETAIL
SHOP
SPENCER
TRENT
VMART
RELIANCE
RETAIL
81.2
200.0
57.3
201.6
35.8
21.9
26.3
14.3
91.8
252.3
69.8
230.9
39.4
24.9
31.2
17.0
103.5
318.3
83.2
256.6
43.1
28.7
36.7
20.1
13
26
21
13
10
14
18
18
28
5.5
5.3
2.5
0.1
2.3
1.3
6.9
6.6
2.9
0.3
2.8
1.6
8.6
8.0
3.4
0.5
3.5
1.9
25
28
23
18
18
138
24
21
32
6.8
8.2
9.2
5.1
6.9
0.4
8.7
9.3
6.0
7.5
8.2
9.4
5.5
7.4
1.0
9.0
9.4
6.3
8.3
8.4
9.6
5.7
7.9
1.8
9.5
9.6
6.4
152
24
39
53
103
136
88
33
44
1.9
1.9
7.3
0.8
0.0
1.0
0.7
2.9
2.1
7.2
1.1
0.1
1.9
0.9
4.2
2.8
1.3
2.6
1.6 3.7
5.4
82
31
30
2
43
204
62
20
36
16.3 20.7 26.7
10.4 12.7 14.6
9.0 12.3 15.5 14.5 18.8 24.9
8.6 10.8 14.5
7.8 13.2 15.9
0.7
7.7
2.9 5.8
7.6 14.6 14.3 15.2
0.2 0.08 0.4
1.0 39.5 47.3 57.2
12.3
970.9 1,310.0 1,584.0
58.0 82.7 101.6
33.0 48.8 61.4 6.6 9.8
Source: MOFSL, Company
Exhibit 13: Valuation comparison
MCap
Company
ABFRL
DMART
FLFL
FRETAIL
SHOP
SPENCER
TRENT
VMART
(INR b)
170
811
88
240
42
8
133
42
CMP
INR
221
1,293
445
477
482
103
402
2,240
TP
INR
240
1,125
585
550
520
175
440
2,450
Upside Reco.
(%)
9%
-13%
31%
15%
8%
70%
9%
9%
Buy
Sell
Buy
Buy
Neutral
Buy
Buy
10.1
17.6
9.8
21.1
7.1
0.4
6.0
RoE (%)
18.3
19.0
10.7
17.0
11.4
2.1
11.1
18.9
21.9
20.6
13.0
15.4
12.1
3.9
13.0
18.9
23.8
16.8
11.7
17.7
7.4
1.2
6.4
18.1
RoCE (%)
14.1
18.2
10.6
14.0
11.1
2.5
7.9
19.2
17.0
19.8
12.5
13.1
11.9
4.4
8.8
19.1
117
90
52
33
62
138
58
P/E (x)
52
69
42
34
36
69
49
35
52
31
32
30
138
52
40
EV/EBITDA (x)
30
50
18
25
17
318
60
31
23
39
13
21
14
112
49
26
19
30
11
18
12
56
39
21
FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
1,279 262
Neutral 18.9
Source: MOFSL, Company
11 June 2019
8

Retail
Store network comparison
Exhibit 14: Reliance Retail’s store network on a spree
FY19
436
224
4,460
FY21E
5,060
1,506
386
1,106
176
Exhibit 15: Expect Easyday’s store count to reach ~1,500 by
FY21E
FY19
FY21E
50*
Big
Bazaar/FBB
D-Mart
Reliance retail (core)*
Source: MOFSL, Company
EasyDay
*Estimate
80
156
189
Star bazaar
Spencer
Source: MOFSL, Company
Exhibit 16: Westside to continue healthy store adds
FY19
FY21E
152
83
44
54
91
199
Exhibit 17: All value-fashion formats to step up store
network
FY19
FY21E
438
304
214
153
93
308
Central
Shoppers Stop
Westside
Source: MOFSL, Company
Brand Factory
Pantaloons
V-Mart
Source: MOFSL, Company
SSSG comparison
Exhibit 18: DMART to outperform Big Bazaar in SSSG front
Big Bazaar
18%
14%
13%
11%
9%
9%
0%
FY18
FY19
FY20E
FY21E
FY18
*Estimate
3%
FY19
FY20E
FY21E
18%
D-Mart
18%
8%
Exhibit 19: Expect Spencer’s SSSG to witness an uptick
Star bazaar
Spencer
7%*
7%
7%
7%
7%
Source: MOFSL, Company
Source: MOFSL, Company
11 June 2019
9

Retail
Exhibit 21: Brand Factory to lead the value retail format
pack in terms of SSSG
Brand Factory
16%
9%
4%
1%
FY19
FY20E
FY21E
6%
4%
-3%
FY18
14%
8%
8%
6%
4%
Pantaloons
V-Mart
Exhibit 20: Westside to garner healthy 9% SSSG (%)
Central
9%
10%
6%
4%
2%
FY18
FY19
FY20E
FY21E
9%
Shoppers Stop
9%
6%
6%
Westside
9%
6%
6%
Source: MOFSL, Company
Source: MOFSL, Company
RoE/RoCE comparison
Exhibit 22: Return ratios for F&G players
FRL
21%
18%
15%
21%
D-Mart
Spencer
18%
17%
13%
4%
0%
4%
20%
1%
RoE (%)
RoCE (%)
Source: MOFSL, Company
Exhibit 23: Return ratios for apparel players
FLF
19%
10% 10%
10%
13%
11% 13%
SHOP
22%
Trent
19%
12%
9%
6%
ABFRL
V-Mart
24%
18%
12% 11%
9%
17%
19%
6%
RoE (%)
RoCE (%)
Source: MOFSL, Company
11 June 2019
10

Retail
Working capital comparison
Exhibit 24: Inventory days comparison for F&G players
(FY19)
92
Inventory days
45
Exhibit 25: Inventory days comparison for apparel players
(FY19)
129
Inventory days
109
71
86
84
35
35
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 26: Player-wise comparison of cash conversion cycle (FY19)
Cash conversion cycle (days)
44
26
0
-16
40
46
39
14
Source: MOFSL, Company
11 June 2019
11

Retail
Exhibit 27: Store Visit: Price comparison for food and HPC products - I
Particulars
Quantity
DMart
(Malad)
1
320
455
140
610
595
371
799
70
64
449
480
445
42
70
320
130
66
58
371
215
23
54
3,930
379
399
560
20
224
240
185
70
160
305
DMart
(Kandivli)
2
320
455
138
610
595
370
799
79
70
441
470
439
42
70
320
120
66
58
371
212
23
54
3,926
378
399
525
20
224
240
215
66
160
285
Offline pricing
Avg. DMart Big Bazaar Big Bazaar Avg. Big
Star bazaar Avg. Offline
Amazon
pricing
(Malad) (Matunga) Bazar pricing (Churchgate)
pricing
3
4
5
6
7
8=Avg.(3,6,7)
9
320
455
139
610
595
371
799
75
67
445
475
442
42
70
320
125
66
58
371
214
23
54
3,928
379
399
543
20
224
240
200
68
160
295
321
603
159
670
625
348
875
64
61
445
485
529
42
60
420
99
72
58
375
214
23
54
4,207
408
412
470
25
224
142
134
90
165
355
321
463
144
599
625
348
875
64
59
443
485
525
42
60
420
99
70
57
378
214
22
54
4,115
450
380
470
20
224
172
164
92
165
325
321
533
152
635
625
348
875
64
60
444
485
527
42
60
420
99
71
58
377
214
23
54
4,161
429
396
470
23
224
157
149
91
165
340
359
160
515
405
899
103
86
333
494
150
587
610
375
858
81
71
445
480
483
42
67
375
99
73
59
376
214
22
54
4,081
402
375
488
21
218
190
171
80
163
340
330
489
145
629
689
385
840
85
70
459
459
525
40
71
387
130
100
57
366
203
45
4,205
391
428
359
18
184
157
137
89
153
309
Online pricing
BigBasket
10
338
490
146
720
729
412
840
73
65
448
485
525
55
73
370
126
99
63
378
226
22
59
4,342
408
450
399
20
224
157
141
98
153
338
Grofers Avg. Online pricing
11
328
492
146
635
379
773
74
86
12=Avg.(9,10,11)
332
490
146
661
709
392
818
77
74
454
472
504
45
73
367
126
93
60
355
214
22
52
4,175
402
434
377
19
207
162
147
95
154
328
12
Food products
Ashirwad Atta
10kg
Dhara Sunflower oil
5l
Saffola Gold cooking oil
1l
Fortune Rice Bran oil*
5l
Dawaat Super Basmati
5kg
Dawaat Rozzana Gold
5kg
India Gate Classic basmati
5kg
Toor dal (private label)
1kg
Masoor dal (private label)
1kg
Mother Dairy ghee pouch
1l
Amul Ghee
1l tin
Gowardhan ghee
1l
Madhur Sugar
1kg
Nestle A+ tetra pack
1l
Tata Tea gold
1kg
Tropicana 100% fruit juice
1l
Real fruit juice
1l
Maggi noodles
420gm (pack of 6)
Bournvita Jar
1kg
Bournvita 5 star
500g
Good Day Butter Cookies
150gm
Parle - G
800gm pack
Adj. Total
HPC products
Surf Excel Easy Wash
4kg
Rin Detergent Powder
6kg
Arial Front Load
2kg
Vim Dishwash bar
300g
Nivea Crème soft soap
4*125g
Dove Soap
3*100g
Pears Pure and Gentle soap
3*125
Godrej No. 1
3*150g
Sunsilk Shampoo Black
340ml
Dove Daily Shine Shampoo
650ml
11 June 2019
479
42
70
385
74
81
61
380
20
55
4,154
398
330
450
20
207
172
164
165
385
462
40
74
344
122
81
61
321
212
53
3,979
406
423
373
19
213
172
164
98
155
338

Retail
Pantene Pro V Silky
shampoo
Dabur Amla hair oil
Parachute hair oil
Bajaj Almond drops hair oil
Harpic Plus toilet cleaner
Lizol Lavender floor cleaner
Colgate Dental Cream
Colgate Max Fresh
Colgate Total Advance
Adj. Total
Grand Total
650ml
450ml
500ml
500ml
1ltr
975ml
300g
300g
2*120g
215
164
190
185
139
141
121
125
140
3,157
7,087
215
164
180
185
131
139
121
125
140
3,111
7,037
215
164
185
185
135
140
121
125
140
3,134
7,062
225
175
185
250
140
149
121
156
153
3,034
7,241
225
184
181
255
152
164
123
126
144
3,092
7,207
225
180
183
253
146
157
122
141
149
3,063
7,224
275
215
255
148
139
170
3,068
7,222
238
172
194
231
143
145
122
145
144
3,088
7,169
244
187
180
142
149
125
153
114
2,851
7,056
245
187
176
165
151
164
117
164
115
3,026
7,368
300
187
263
187
178
155
160
140
144
154
156
121
159
130
120
2,857
2,971
6,836
7,146
Source: MOSL, Company
Exhibit 28: Store Visit: Price comparison for food and HPC products - II
Particulars
DMart
(Malad)
1
Adj. Total for Food products
Adj. Total for HPC products
Grand Total
3,930
3,157
7,087
DMart
(Kandivli)
2
3,926
3,111
7,037
Avg. DMart
pricing
3
3,928
3,134
7,062
Offline pricing
Big Bazaar
(Malad)
4
4,207
3,034
7,241
Big Bazaar
Avg. Big
Star bazaar Avg. Offline
(Matunga) Bazar pricing (Churchgate)
pricing
5
4,115
3,092
7,207
6
4,161
3,063
7,224
7
4,154
3,068
7,222
8=Avg.(3,6,7)
4,081
3,088
7,169
Amazon
9
4,205
2,851
7,056
Online pricing
BigBasket
10
4,342
3,026
7,368
Grofers
11
3,979
2,857
6,836
Avg. Online
pricing
12=Avg.(9,10,
11)
4,175
2,971
7,146
Source: Company, MOSL
Exhibit 29: Store Visit: Price comparison for food and HPC products - III
Comparison
Online v/s Offline
D-Mart v/s Big Bazaar (Malad)
D-Mart v/s Big Bazaar (Avg)
(Avg) D-Mart v/s Star Bazaar
(Avg) big Bazaar v/s Star Bazaar
Calculation
12/8*100
1/2*100
3/6*100
3/7*100
6/7*100
Food products
2%
-7%
-6%
-5%
0%
HPC products
-4%
4%
2%
2%
0%
Total
0%
-2%
-2%
-2%
0%
Source: MOSL
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NOTES
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Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
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website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
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Retail
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL
even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
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The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
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document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
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The person accessing this information specifically agrees to exempt MOFSL or any of its
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misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
11 June 2019
16