Tata Group’s Zudio makes big move with first flagship store launch in Noida

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February 9, 2024

On Friday, Zudio, the affordable fashion brand owned by the Tata Group, opened its first flagship store in Noida.

Nestled beside the towering Hanuman statue and temple in Noida’s Sector 49, this store sprawls across 12,000 square feet, spanning two floors.

This marks the second Zudio store in Noida, yet it stands as its first high-street flagship store within the NCR city. Trent Ltd., the brand’s proprietor, presently manages a store in the Great India Place Mall located in Sector 38A.

Zudio, emerging as one of India’s most prominent success stories in value fashion, is undergoing rapid expansion to leverage the goodwill and buzz it has cultivated over the years.

The budget-friendly fashion label aims to launch approximately 200 stores throughout 2024-25. Should this come to fruition, Trent will see the total count of Zudio outlets reach between 650 and 700 by March 2025.

Continue Exploring: Zudio unveils its biggest store in North India, offering affordable fashion

Tata is setting its sights on transforming Zudio into a billion-dollar brand in the near future. P. Venkatesalu, CEO of Trent, outlined this ambition in an April blog post on the Tata Business Excellence Group’s website, stating their objective to achieve a compounded annual growth rate (CAGR) of over 25%. Additionally, they aim to maintain an Earnings Before Interest, Taxes, Depreciation, and Amortization (EBIDTA) margin of over 10%.

The seven-year-old Zudio has significantly contributed to Trent‘s business, driving its standalone revenue to more than double from under INR 3,500 crore before the pandemic to INR 8,000 crore in 2022-23. This surge has propelled the retail arm’s market capitalization to over $5 billion.

Trent, Tata’s retail venture, oversees operations of the Westside department store chain and Landmark bookstores. Moreover, the company has formed two joint ventures with Spain’s Inditex SA to manage the Zara and Massimo Dutti labels in India.

Zudio offers a diverse range of apparel for men, women, and kids, along with beauty products and loungewear, all attractively priced below INR 1,000.

Continue Exploring: Zudio expands its reach in Gujarat, opens first store in Palanpur

Swiggy Dineout kicks off Great Indian Restaurant Festival 2024 with over 7,000 participating restaurants across India

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February 9, 2024

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Swiggy, the Bengaluru-based food delivery giant, has announced the launch of Dineout’s flagship event, the Great Indian Restaurant Festival (GIRF), which began on February 7 and will continue until March 31. This festival features the participation of over 7,000 restaurants across 34 cities in India, offering discounts and deals to customers.

Throughout the festival, patrons can enjoy a generous 50% discount on dining bills at participating restaurants. HDFC Bank credit cardholders can further benefit from an extra 15% savings on GIRF transactions. Moreover, exciting partner deals are on offer, such as 20% off Uber rides and 40% off movie tickets through the Cinepolis app/website.

For the festival, Swiggy Dineout has collaborated with renowned eateries including Punjab Grill, Cafe Delhi Heights, Chili’s, Jamie’s Pizzeria, Roxie, Barbeque Nation, One8 Commune, Irish House, and Hard Rock Cafe.

In its latest edition, GIRF will showcase newcomers like Biergarten, Antera, Lord of Drinks, Ministry of Beer, and Anardana, alongside esteemed five-star hotels including Marriott, Leela, Hyatt, and Holiday Inn, providing opulent dining experiences.

Continue Exploring: Swiggy may file IPO by fiscal year end, plans to raise capital with combination of offer-for-sale and new issue; Prosus contemplates stake reduction

Swapnil Bajpai, Head at Swiggy Dineout, said, “Be it an avid food connoisseur or someone looking to explore new culinary tastes, GIRF 2024 has something in store for everyone. We are converging the country’s best restaurants, exciting offers, and unbeatable savings. Our goal is to make dining out more accessible and enjoyable for our customers while celebrating the best of what the restaurant industry has to offer.”

The company asserted that it saved INR 100 crore on food bills by attracting two million diners last year.

The festival will take place in major metropolitan areas like Delhi, Mumbai, Bengaluru, Hyderabad, and Chennai, as well as Tier-II cities such as Agra, Ahmedabad, Jaipur, and Kochi. It will include restaurant deals, partner offers with Uber, Pernod Ricard, and Cinepolis, along with additional payment options from RuPay, Simpl, and American Express.

Swiggy acquired Dineout, an online restaurant booking platform, from Times Internet in May 2022. Reports suggest the transaction was valued at $120 million in an all-stock deal.

Continue Exploring: Swiggy breaks new ground: Becomes the first food delivery platform to launch services in Lakshadweep

Emami delivers robust Q3 performance: Posts 12% growth in PAT to INR 261 Crore

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February 9, 2024

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Emami Ltd, a leading FMCG company, announced a notable 11.88% increase in consolidated net profit, reaching INR 260.65 crore for the December quarter of the fiscal year 2023-24. This growth was primarily driven by enhanced margins resulting from lower input expenses.

As per Emami’s regulatory filing, the company had recorded a net profit of INR 232.97 crore in the October-December period of the previous fiscal year.

During the quarter in review, revenue from operations increased by 1.38%, reaching INR 996.32 crore, compared to INR 982.72 crore in the corresponding period.

The domestic business revenue remained flat, while non-winter products saw a 5% growth. Additionally, the international business exhibited a constant currency growth of 11%, as reported by the Kolkata-based firm in its earnings statement.

Continue Exploring: Emami Group taps McKinsey & Co to explore expansion into packaged essentials and kitchen appliances

Regarding margins, Emami said that due to reduced input costs, the company experienced an improvement in gross margins, reaching 68.8 per cent, reflecting a substantial expansion of 290 basis points during the quarter.

In the December quarter, EBITDA stood at INR 315 crore, marking a 7% increase, with margins expanding by 170 basis points to reach 31.6%.

The company’s total expenses amounted to INR 681.45 crore, reflecting a 1% year-on-year increase.

Total income stood at INR 1,013.03 crore, indicating a 2.36% increase from the corresponding period of the previous year.

“The third quarter witnessed subdued demand trends, particularly in rural markets. Moreover, the period was characterized by the late onset of winter, negatively impacting the demand for winter contextual products,” it said.

Continue Exploring: Emami Limited acquires 26% equity stake in Axiom Ayurveda, expands into juice category with AloFrut brand

Despite facing these challenges, the company successfully navigated the dynamic business environment, showcasing resilience and achieving profit-led growth in Q3FY24, it added.

“Disrupted winter, weak rural demand and continued inflationary woes impacted the winter and discretionary offtakes. We remain committed to delivering volume-led profitable growth going forward aided by accelerated scale up of emerging channels, distribution initiatives, ongoing brand and strategic investments coupled with launch of innovative products,” Emami said.

Emami’s shares were trading at INR 487.25 each on the BSE, marking a 0.41% increase from the previous close.

KFC, Pizza Hut operator Sapphire Foods reports biggest quarterly profit drop since 2021 IPO

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February 9, 2024

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Sapphire Foods India, the company behind KFC and Pizza Hut eateries, reported its largest quarterly profit drop since going public in 2021. This decline was driven by intensified competition in the domestic market and reduced spending from consumers cautious about inflation, leading them to scale back on fast-food purchases.

The Yum Brands franchisee saw its consolidated net profit fall nearly 69% to 101.4 million rupees ($1.22 million) for the quarter ended Dec. 31.

Continue Exploring: Indian appetite for pizzas and burgers wanes: Domino’s and McDonald’s franchisee results reflect decline in dining out trends

According to LSEG data, analysts had anticipated an average profit of 239.6 million rupees.

During the quarter, inflation-hit consumers continued to reduce spending on discretionary items. To address this trend, fast-food outlets in India have been introducing more affordable menu options and ramping up marketing efforts to stimulate demand.

Nevertheless, companies like Sapphire, which offer pizzas starting at INR 169, have also encountered tough competition from local pizzerias offering more affordable alternatives, thereby impacting the profits of larger quick-service restaurants.

Continue Exploring: Domino’s Pizza takes on upscale pizzerias in India with premium offerings and hyper-localized approach

Same-store sales, indicating revenue growth from stores operating for a minimum of one year, dropped by 2% at KFC outlets and experienced a significant 19% decline at Pizza Hut locations.

The company’s total revenue increased by 12% to reach 6.66 billion rupees, while expenses surged by nearly 16%. Consequently, its margins on earnings before interest, tax, depreciation, and amortization (EBITDA) contracted from 19.6% a year ago to 18.4%.

Shares of Sapphire, which also manages Pizza Hut outlets in Sri Lanka, saw a 2% increase following the announcement of the results. This contrasts with a 2% decline in the third quarter.

Mamaearth parent Honasa Consumer sees 250% YoY surge in net profit to INR 26.1 Crore in Q3FY24

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February 9, 2024

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Honasa Consumer Ltd, the parent company of the D2C unicorn Mamaearth, reported a 250 percent year-on-year increase in net profit, reaching INR 26.1 crore in Q3FY24. This surge was fueled by strong demand during the period, as reflected on a consolidated basis. Notably, the company had reported a net profit of INR 7.4 crore in the same quarter of the previous fiscal year.

The Gurugram-based startup, which entered the market in 2023, reported an operating revenue of INR 488.2 crore, marking a 28 percent increase from the previous year. In Q3FY23, Honasa had reported an operating revenue of INR 382.2 crore.

Continue Exploring: Mamaearth marks its entry on NSE with nearly 2% premium debut

In comparison to the previous quarter, the company managing Mamaearth experienced a 2 percent decline in operating revenue, dropping from INR 496.1 crore. Additionally, its net profit decreased by 12 percent from INR 29.8 crore on a quarter-on-quarter (QoQ) basis.

During an analyst call, Mamaearth CEO Alagh highlighted that the first half (H1) typically represents a stronger period for the company compared to the second half (H2), emphasizing that products such as facewash, sunscreen, creams, and shampoos constitute some of its core offerings.

In the said quarter, the company witnessed a sales growth of 28% year-on-year.

In terms of the portfolio, the company sold approximately 10 lakh color care units, reaching an Annual Recurring Revenue (ARR) of INR 150 crore. Meanwhile, The Derma Co. attained a positive EBITDA status year-to-date.

“Four out of six brands from our portfolio are already in the INR 150 crore ARR club and we see this as a testimony of our capabilities. Having built colorcare with Mamaearth showcases our ability to build new categories and versatility of the brand. As we move forward, focus continues to be on purpose-based brand building, innovation and distribution expansion,” said Varun Alagh, Chairman and CEO, HCL.

According to filings, employees of the holding firm exercised 3,695,191 stock options during the quarter, while the promoters of Momspresso exited.

“During the current quarter, the promoters of Momspresso resigned from their employment and the vesting conditions of the employee stock option were not fulfilled. Accordingly, the group has reversed the share based payment expense of INR 47.47 million during the current quarter,” it added.

The stock closed the day at INR 432.75 per share, marking a 3.54 percent increase from its previous close on the BSE.

Continue Exploring: Nuvama analysts bullish on Mamaearth for MSCI Smallcap Index, Nykaa gaining momentum for Global Standard Index

IPO-bound OYO’s Q3 FY24 profit doubles QoQ to INR 30 Cr

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February 9, 2024

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OYO, the IPO-bound hospitality unicorn, achieved its second consecutive profitable quarter in Q3 of the financial year 2023-24 (FY24), doubling its profit after tax to INR 30 Cr, Founder and CEO Ritesh Agarwal said.

At a town hall meeting on Friday, Agarwal announced that the startup’s first profitable quarter was in September, with a net profit after tax of over INR 16 crore.

“In the upcoming quarters, we anticipate a consistent rise in PAT, driven by enhanced patron confidence, improved customer experience, and favourable market conditions conducive to sustained growth,” Agarwal said.

According to sources, Agarwal stated that OYO experienced a nearly 10% year-on-year revenue growth in the third quarter of FY24. Additionally, the company managed to reduce its operating costs by 15% compared to the same quarter last year through optimization efforts.

He mentioned that the platform’s hotel count surged by almost 27%, reaching 17,000 over the past year.

It’s worth noting that OYO witnessed a 34% decrease in its net loss, dropping to INR 1,286.5 Cr in FY23 from INR 1,941.5 Cr in FY22. Additionally, operating revenue increased by 14% to INR 5,463.9 Cr in FY23 from INR 4,781.3 Cr in the preceding fiscal year.

Agarwal announced during the town hall that the startup’s adjusted EBITDA reached INR 275 Cr in FY23 and is projected to increase to approximately INR 1,000 Cr in the current fiscal year.

Recently, OYO also repaid INR 1,620 Cr of its outstanding Term Loan B (TLB), accounting for about 30% of its TLB, which has a term until June 2026.

Continue Exploring: OYO initiates INR 1,620 Cr debt repurchase, aims to proactively settle one-third of Term Loan B

Last month, it was reported that the startup was in talks with Malaysian sovereign wealth fund Khazanah Nasional Berhad to raise close to $400 Mn in a fresh funding round at a valuation of $6 Bn.

Continue Exploring: Oyo Hotels in advanced talks with Khazanah Nasional Berhad for $400 Million funding boost

Established in 2012 by Ritesh Agarwal, OYO provides a range of accommodations including holiday homes, casino hotels, coworking spaces, budget hotels, and corporate stays, among others.

Last year, the SoftBank-backed startup filed its draft red herring document (DRHP) for its initial public offering (IPO) via a confidential route. Additionally, it reduced the IPO size to $400-$600 Mn from the initial plan of raising INR 8,430 Cr ($1.2 Bn) when it first filed the DRHP in 2021.

Govt infrastructure spending, elections to drive consumption growth, says Nestle CMD

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February 9, 2024

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Nestle India’s Chairman and Managing Director, Suresh Narayanan, said that the government’s infrastructure spending, moderating inflation, and the upcoming elections are likely to boost consumption and lessen the polarities in consumer trends where premiumisation has been booming amid tepid mainstream demand.

Narayanan stated that the government’s commitment to invest INR 11 trillion in infrastructure in the recent vote-on-account budget will drive job creation and increase household incomes. He emphasized that a significant portion of these incomes will be directed towards the consumption of essential goods.

Highlighting the polarisation in consumer demand, he said, “If you are a mainstream product, you are facing the vagaries of a combination of job losses and food inflation which continues to be choppy.”

He said there are some stress points and “the Diwali festival demand wasn’t as buoyant as expected”.

“Many people bought more cars and more luxury items but the (demand) for the common man’s products was relatively muted.”

Continue Exploring: Nestle India ramps up investments, sets sights on robust growth with INR 6,000-6,500 Crore expansion plan

However, Narayanan added that the long-term growth outlook remains positive, and the company aims to achieve revenue growth of 11-12% in 2024, building upon a strong base.

“The underlying growth fundamentals continue to be strong… You can have short-term wobbliness but the long-term sustainability of the trajectory is what we are confident about,” Narayanan said. He said the demand outlook is “fairly positive despite some slog overs”.

The maker of Maggi noodles and KitKat chocolates is investing INR 6,500 crore on capacity expansion over five years – its highest investment in such a timeframe, he said.

Continue Exploring: Nestlé India collaborates with SOCIAL and BOSS Burger to debut MAGGI’s plant-based menu across major cities

Erratic monsoon rains, an extended rural slowdown, and food inflation have contributed to a slowdown in sales across FMCG categories in the October-December 2023 quarter.

In a report released on Tuesday, researcher NielsenIQ predicted that following two years of expansion, the FMCG sector’s value growth could decrease by half to 4.5-6.5% this year, compared to 9.3% in 2023 and 8.4% in 2022.

Narayanan said that despite the general decrease in inflation levels compared to 2022, the stability in commodity prices should result in an uptick in consumption.

“We also have a lot of hope for economic activity to pick up around the elections,” he said.

For the December quarter, Nestle India reported a 4.4% year-on-year rise in net profit at INR 655.6 crore impacted by one-time service costs, while domestic sales grew 8.9% on the back of pricing and strong momentum in ecommerce and out-of-home channels.

Continue Exploring: Nestle India sees 4.3% increase in Q4 net profit, reaching INR 655.61 Crore

India’s hospitality sector records 15.8% year-on-year RevPAR growth in Q4 2023: JLL Report

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February 9, 2024

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According to JLL’s Hotel Momentum India (HMI) Q4 2023 report released on Friday, the Indian hospitality sector saw continued year-on-year growth in performance in the fourth quarter of 2023. This growth was primarily attributed to a significant increase in the Average Daily Rate (ADR) of 14.6% compared to Q4 2022.

The report indicates that the sector experienced a notable increase of 31% in revenue per available room in Q4 2023 compared to Q3 2023. It further states that the fourth quarter witnessed steady growth in average daily rates, attributed to various factors including weddings, corporate and social MICE events, leisure travel, and year-end festivities.

“Amid stable occupancy levels, the six markets have demonstrated strong ADR performance, benefiting from sustained corporate demand and international events such as the ICC Cricket World Cup, as well as the wedding season. Hyderabad led in terms of ADR growth with 24.7%, followed by Delhi and Mumbai at 20.3% and 16%, respectively,” the report stated.

According to JLL, the momentum from the previous quarter is anticipated to continue into 2024, bolstered by the wedding industry, corporate and social MICE demand, and the increasing importance of specialized tourism sectors such as religious tourism.

Continue Exploring: Indian hospitality industry set for a record-breaking 2024: Surge in new hotel rooms expected

Business travel is also expected to bounce back by the end of the first quarter of 2024 as companies hold their year-end meetings. The industry shall remain robust, driven by ADR growth, strong domestic demand fueled by higher disposable incomes, and targeted government initiatives.

In Q4 2023, contracts were signed for a total of 82 hotels, encompassing 8,741 keys. Among these, 15 hotels were conversions of existing properties, representing 14% of the total signed inventory for that quarter.

In Q4 2023, Bengaluru took the lead in RevPAR growth, boasting an impressive increase of 31.9% compared to Q4 2022. Following closely behind were Delhi and Hyderabad, with year-on-year growth rates of 26.3% and 23.5%, respectively.

“As 2023 ends on a high note, the hotels industry is at the precipice of a fundamental shift in its growth trajectory. With the rising relevance of key trends such as pilgrimage tourism, airport and complementary developments, and infrastructural upgrades, we are witnessing an increased interest from hotel developers and investors who wish to participate in this growth story. We expect the sector to continue witnessing strong ADR levels on the back of softening of supply pressure, rising disposable incomes and increased air connectivity”, said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.

Meat retailer Licious lays off 80 employees in bid for enhanced efficiency

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February 9, 2024

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Licious, the omnichannel meat retailer, has laid off 80 employees, representing 3% of its total employee base. The firm said the layoffs were part of an “operational reset to sharpen growth focus”.

It employs 650 corporate staff members and 2,350 employees dedicated to production and supply chain operations.

In a statement, the company said that the impacted employees are being offered two months’ salaries as compensation, along with the variable payment for FY24.

The company stands as the sole unicorn in its sector, which has experienced a gradual slowdown over the past eighteen months.

The company’s revenue for FY23 stood at INR 748 crore, marking a 9% growth compared to the previously projected revenue of INR 1,500 crore.

Continue Exploring: Licious records INR 748 Cr in meat sales for FY23 as growth plateaus

The meat and seafood firm has been working to expand its range of ready-to-eat products. Late last year, it also came out with its own plant-based meat brand, UnCrave, as it tried to tackle the seasonal nature of the business—a large number of Indians do not consume meat during festivals.

Unilever eyes competitive volume growth in India, anticipates price reduction amid commodity trends

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February 9, 2024

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Unilever, the multinational FMCG firm, is focusing on driving competitive volume growth in the Indian market and expects a price reduction in its products “if current commodity prices persist.”

In its earnings statement on Thursday, Unilever reported that its India business, Hindustan Unilever Limited (HUL), experienced mid-single digit growth in the December quarter. This growth, driven by volume, was facilitated by reduced input costs, leading to negative pricing during the fourth quarter.

“We are focused on driving competitive volume growth while pricing is expected to remain marginally negative if current commodity prices persist,” it said.

In the Indian market, Unilever’s sales were flat in the fourth quarter as pricing turned negative, mainly driven by price reductions in fabric cleaning and skin cleansing bars due to commodity movements.

This also impacted Unilever’s overall fabric cleaning segment, which was negative in the December quarter, as the “pricing reflects commodity deflation, particularly in India,” it added.

Additionally, in 2023, the company received a tax refund of 0.4 billion euros from India.

The company adheres to a fiscal year running from January to December.

In terms of volume, India stands as the largest market for the Anglo-Dutch FMCG major firm.

Continue Exploring: Unilever CEO Hein Schumacher lauds Hindustan Unilever as strongest and largest operation globally

In 2023, the company recorded a turnover of 59.6 billion euros. Its underlying sales growth for the full year reached 7%, driven by a 0.2% increase in volume and a 6.8% rise in prices.

During the December quarter, Unilever’s turnover reached 14.2 billion euros, marking a 4.7% increase.

Its Asia Pacific Africa Zone, which consists of large markets such as India and China, contributed 44% of the group turnover in 2023. It posted an underlying sales growth of 6.5% with price growth of 5.3% and volume growth of 1.1%.

China grew low single-digit in a deflationary market with low consumer confidence.

In the fourth quarter, sales in Indonesia experienced a double-digit decline as consumers steered clear of multinational company brands due to the geopolitical tensions in the Middle East.

Unilever CEO Hein Schumacher said, “Today’s results show an improving financial performance, with the return to volume growth and margins rebuilding. However, our competitiveness remains disappointing and overall performance needs to improve. We are working to address this by improving our execution to unlock Unilever’s full potential.”

Regarding the outlook, Unilever stated that it anticipates underlying sales growth (USG) for 2024 to fall within their multi-year range of 3-5%, with a focus on achieving a more balanced distribution between volume and price.

Continue Exploring: Unilever named official sponsor of UEFA EURO 2024, bringing favourite brands to the pitch

“We anticipate a modest improvement in underlying operating margin for the full year. We will deliver this through gross margin expansion, driven by a step-up in productivity and net material inflation back to more normal levels,” it said.

Last month, HUL reported a marginal increase of 1.08% in its consolidated net profit, amounting to INR 2,508 crore for the December quarter.

During the quarter, its revenue from product sales saw a slight decrease, amounting to INR 15,259 crore, compared to INR 15,314 crore in the corresponding period last year.

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