India’s top 10 food retailers accumulate $2.2 billion losses in 2013-14: Crisil

India’s top 10 food retailers accumulate $2.2 billion losses in 2013-14: Crisil

Wed, May 28 2014

MUMBAI (Reuters) – India’s top 10 food retailers are estimated to have accumulated losses worth $2.20 billion in the fiscal year ended March 2014, as they scaled up operations and refined their business models, according to a report by ratings agency Crisil.

The companies, which the report estimated generated $3.98 billion in revenue during the same period, include Wal-Mart’s (WMT.N:QuoteProfileResearchStock Buzz) Indian operations which run the Best Price Modern Wholesale stores, Metro Cash & Carry India, Aditya Birla Retail, Bharti Retail Ltd, Reliance Fresh Ltd which is a part of Reliance Industries (RELI.NS: QuoteProfileResearchStock Buzz), and Trent Hypermarket Ltd which is a part of Tata Group-controlled Trent (TREN.NS: QuoteProfileResearchStock Buzz).

Competition from local mom-and-pop stores, which constitute 90 percent of India’s $500 billion retail market, price-sensitive customers, and low margins remain the core challenges to the growth of organised food retailing in the country, the report said.

Food and grocery account for two-thirds of the retailing market and organized food retail contributes 2 percent to this.

Crisil, however, does not expect any consolidation in the sector as most companies are at an advanced stage of investment and backed by deep pocket promoters.

($1 = 59.0250 Indian Rupees)

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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