Risk analysis of shoppers stop presentation

• India : Retail Industry Overview 2011
• Shoppers Stop: An Overview
• Store Formats
• Strategic Alliance
• Type Of Retail Outlets
• Approach
• Vision
• International Brands
• Loyalty Program
• Customer Satisfaction Index
• Adverse Financial Analysis
• SWOT Analysis
• Risk Points raised by the Auditors
• Competitor Common Stock Comparison

• Indian Retail Market Share: 22% of GDP
• Contribution towards Total Employment: 8%
• Total Retail Market : US $450 billion
• Expected Growth in Retail Market: US $804.06 billion by
2016, market is expected to grow at 12% over the next 5
years and 7% during the next 10 years.
• Compounded Annual Growth Rate (CAGR) of Indian Retail:
13.3%
• Organized Retail Market: US $450 billion (5.5% of total market)
• Expected Growth in Organized Retail Market: Expected to grow
at 12.4% by 2016 and to US $200 billion by 2020.

Source: India Retail Report 2012

HEADQUATERS Eureka Towers,9th Floor, B Wing, Mindspace, Link
Road,
Mumbai, Maharashtra-400064
INDUSTRY Retail
TYPE Public Company
STATUS Operating
COMPANY SIZE 8000 employees
NUMBERS OF STORES 51
2012 REVENUES Rs. 1947.869 crore
NET PROFIT Rs. 64.26 crore
TOTAL RETAIL 4.78 million sq. ft. as of 30th September 2012
AREA
FOUNDED 1991

Sources: http://corporate.shoppersstop.com/

SHOPPERS STOP: AN OVERVIEW
About SHOPPERS STOP Ltd.

Shoppers Stop Ltd., a pioneer in modern retailing in India, has been promoted by K Raheja Corp.
Group (Chandru L. Raheja Group), one of the leading groups in the business of real estate
development and hotels in the country.
Shoppers Stop Ltd along with its Subsidiary Company Hypercity Retail (India) Ltd and Joint Venture
Companies Timezone Entertainment Pvt. Ltd and Nuance Group (India) Pvt. Ltd. operates more
than 4.78 million sq. Ft. as of 30th September 2012 in the country.
Shoppers Stop and its associate companies are involved in retailing through department stores,
specialty stores, entertainment zones and large hypermarkets.

Management- SHOPPERS STOP Ltd.
Chandru L Raheja Chairman / Chair Person B S Nagesh Vice Chairman
Govind Shrikhande Managing Director Ravi C Raheja Director
Deepak Ghaisas Director Gulu L Mirchandani Director
Neel C Raheja Director Nitin Sanghavi Director
Shahzaad S Dalal Director Nirvik Singh Director

Sources: http://corporate.shoppersstop.com/

Shoppers Stop Ltd. Consolidated with SSL

SS Department Stores Business Subsidiary Companies 30% JV Companies 2
71% Sales Contribution Sales Contribution 2% Sales Contribution

SSL Stake SSL Stake
51% 50%
•No of stores: 1
•GFA: 0.19 lacs sq ft
•No of stores: 54 • No of stores: 12
•GFA: 30.62 lacs sq ft. SSL Stake
• GFA: 12.35 lacs sq ft. 36.82%
• Sales as of Sep 2012 : Rs. 406 Cr
• Sales for full year as of March • No of stores:18
2012 : Rs 761 Cr •GFA: 1.20 lacs sq ft.
• No of stores: 12
• GFA: 1.99 lacs sq ft. No of stores: 39 SSL Stake
GFA: 0.18 lacs sq ft. 100%

• No of stores: 82
• Own Stores : 41
•No of stores: 5 •10 – 11 : 35 lacs visitors
• GFA: 2.33 lacs sq ft. Well diversified portfolio
•GFA: 0.18 lacs sq ft. •11 – 12 : 72 lacs visitors to capture the consumer’s
wallet share

Note : Above figures as of 30TH September 2012.
Source: Shoppers Stop Annual Report 2011-12 GFA: Gross Floor Area

• Shopper's Stop Ltd. has entered into a non exclusive retail
agreement with world-renowned cosmetics major Estee Lauder to
open M.A.0 Cosmetics stores in India.
• Shopper's Stop Ltd. has a 51% stake in Hypercity Retail (India) Ltd.
• Mothercare PLC of UK, the largest specialist retailer for infant and
toddler care, is now in India.
• Shopper's Stop Ltd.'s entry into airport retailing is marked by a joint
venture with The Nuance Group AG of Switzerland, the world's
leading airport retailer.
• Shopper's Slop Ltd has forayed into the Entertainment sector by
acquiring a 36.82% stake in Timezone Entertainment Private
Limited which is in the business of setting up & operating Family
Entertainment Centres (FECs).

Source: Shoppers Stop Annual Report 2011-12

TYPE OF RETAIL OUTLETS

Shoppers Stop Ltd.

Departmental Store-
Hypermart- HyperCity -12 Specialty Retailing-138
Shopper’s Stop- 54

Beauty, Cosmetics
Parenting Products- Crossword Home Products Retailing-
Retailing- MAC, Estee
Mothercare- 5 Book store- 82 HomeStop- 12
Lauder Clinique- 39


TYPE OF APPROACH

75 per cent of the
total sales of SSL
comes from
metros and Tier-1
cities. SSL will open nearly 80 per
cent of the new stores in
the top 24 cities.

TRANSITIONED THE SHOPPERS STOP BRAND FROM
PREMIUM TO BRIDGE-TO-LUXURY
Luxury

Bridge to Luxury
2009

Premium

2005
Contemporary

Popular

Mass

Source: http://corporate.shoppersstop.com/investors/presentation-analyst.aspx

INTERNATIONAL BRANDS
Improved Product Mix and Brands Profile to Attract “Aspirational” Customers

• Jack & Jones, French Connection, CK
Jeans, GAS, ESPRIT, Tommy Hilfiger, Mustang
& Mango in apparel segment
• Loccitane, Lancome, MAC, Clinique & Estee
Lauder in cosmetics
• CK, Armani & Gucci in sun glasses
• Burberry, Nina Ricci, Diesel & Boss in watches

PRIVATE LABELS
SHOPPERS STOP PRIVATE LABELS
•Stop- Mens formal/casual/ethnic/womens western/ethnic, kids casual/ethnic
•Kashish – Mens & womens ethnic
•Life- Mens & womens Fashion
•Vettorio Fratini- Premium formal& semi formal mens wear
•Haute curry- fusion wear for women
•Elliza Donatein- corporate womenswear
•Ijeans wear- Mens denim

• The First Citizen
Shoppers’ Stop’s customer loyalty program is called The First Citizen. The
program offers its members an opportunity to collect points and avail of
innumerable special benefits. Currently, Shoppers’ Stop has a database of
over 25.03 lakh members who contribute to nearly 72% of the total sales of
Shoppers’ Stop.


CSI
100
80
60
40
20 CSI
0
Jan/06
May/06

Jan/07
May/07

Jan/08
May/08

Jan/09
May/09

Jan/10
May/10

Jan/11
Sep/06

Sep/07

Sep/08

Sep/09

Sep/10

May/11
Customer satisfaction index is calculated
based on the following parameters: There was a significant increase in
Merchandising Range and Quality customer satisfaction from year
Store Environment 2007 to year 2009, although there
Staff is a small decrease in customer
Transaction Efficiency satisfaction in year 2010 from year
Loyalty Programme 2009.
Schemes This may be due to increased
Promotions choices offered to the customers by
Customer experience in Shoppers Stop wrt the other stores and hence increasing
competitor stores expectations of the customer

Source: Shoppers Stop Annual Report 2011.12

PARAMETERS USE ADVERSITIES
Conversion Ratio Conversion is the ratio of the There has been a consistent fall in the
number of transactions (Cash consolidated conversion ratio starting
Memo) versus the total customer from financial year 2009-10 to 2011-
entry into the stores. Tracking 12. The financial year 2011-12 saw a
conversion helps the retailer fall by 1% to 23% from previous year
understand the productivity of his 2010-11 when it was 24%. A further fall
front-end store employees and the by 4% is expected in Quarter-II of
attractiveness of the merchandise Financial year 2012-13.
and services.
Like To Like Sales Volume (%) A consolidated consistent fall has been
noted in the LTL volume in October to
December 2011 by 5% and yet again in
financial year 2011-12 by 4%. A further
fall by 4% is expected in Quarter-II of
Financial year 2012-13.

Private Level Sales (%) Company aims to provide a Although there has been a growth in
differentiated and unique offering to Consolidated Private Label Mix up to
the customer through its own private 6.4% during financial year 2011-12 but
labels as well as through Consolidated Private Label Sales
exclusive private brands. Growth has fallen by 2.4% during the
same period. A further fall by 13% is
expected in Quarter-II of Financial year
2012-13.

Source: Shoppers Stop Annual Report, 2011-12, Shoppers Stop Quarterly Report s of 2011-12

PARAMETERS DEFINATION AND ITS USE ADVERSITIES
Gross Marginal Return on GMROF helps to maximise the cash A consistent fall has been noted
Floor % (GMROF) margins. in the Consolidated GMROF :
 April to December 2011 by 6%
Quarter III of 2011-12 by 15%
Quarter IV of 2011-12 by 10%
Financial Year 2011-12 by 7%

Gross Marginal Return on GMROI helps to optimise inventory A continuous fall in Consolidated
Inventory % (GMROI) levels. GMROI (%) has been noticed
from financial 2009-10 at 4.25%
to 4.17% in 2010-11 and 4.01%
in 2011-12.
Gross Marginal Return on GMROL helps to increase labour A consistent fall has been noted
Labour % (GMROL) productivity. in the Consolidated GMROF :
 April to December 2011 by 2%
Quarter III of 2011-12 by 15%
Quarter IV of 2011-12 by 6%
Financial Year 2011-12 by 6%


PARAMETER USE ADVERSITIES
Operating Expenses There has been consistent steep rise noted in
Operating Expenses of both SSL Alone and
Consolidated:
 April to December 2011 to SSL- 21% and
Consolidated- 36%
Quarter III of 2011-12 to SSL- 23% and
Consolidated- 24%
Quarter IV of 2011-12 to SSL- 28% and
Consolidated- 26%
Overall Financial Year 2011-12 to SSL- 23% and
Consolidated- 33%
A further rise by 26% in SSL and 20% in
Consolidated version is expected in Quarter-II of
Operating Profit Operating Profit of SSL (without exceptional
items) has decreased by 5% to Rs.14,391lacs
from Rs.15,211lacs in the previous year whereas
Consolidated have fallen by 18% in 2011-12 from
its previous years. A further fall by 27% in SSL and
37% in Consolidated version is expected in
Quarter-II of Financial year 2012-13.


Profit Before Tax (PBT) There has been consistent and substantial fall noted
in SSL Alone and whereas huge effects were
reflected on Consolidated financial figures:
Consolidated- 77%
Consolidated- 65%
Consolidated- 144%
Consolidated- 86%
A further fall by 65% in SSL and 212% in
Profit After Tax (PAT) There has been consistent and substantial fall noted
in SSL Alone and whereas major effects were
reflected on Consolidated financial figures:
Consolidated- 49%
Consolidated- 44%
Consolidated- 88%
Consolidated- 56%


Finance Charges Finance Charges have at times risen to
enormous level in both SSL Alone and
Consolidated financial figures:
 April to December 2011 to SSL- 30% (fall in
charges) and Consolidated- 58%
Consolidated- 72%
Consolidated- 35%
Overall Financial Year 2011-12 to SSL- 14%
(fall in charges) and Consolidated- 45%
Net cash used for investing There has been consistent shortage of
activities Consolidated cash available for investing
activities:
 April to December 2011 – Rs.16,0 66
Overall Financial Year 2011-12 – Rs.16, 584
A further fall by Rs.5, 858 is expected during April
to September 2012.


Gross Profit Margin Ratio Higher Gross Profit Margin means The gross margin of SSL Alone has decreased
more efficient. during the year 2011-12 to 32.7% from 33.0% as
compared to the last year, principally on account
of increases in levies and the transition in trading
models.
PAT Margin Ratio Net profit margin measures the The PAT margin of SSL Alone has decreased
overall efficiency of the business during the year 2011-12 to 2.9% from 4% as
compared to the previous year 2010-11.Whereas
PAT margin of Consolidated version has
decreased during the year 2011-12 to 3.38%
from 4.6% as compared to the previous year
2010-11.
Interest Coverage Ratio The interest coverage ratio is a The Interest Coverage Ratio of SSL Alone has
measure of the number of times a decreased during the year 2011-12 to 5.23%
company could make the interest from 8.9% as compared to the previous year
payments on its debt with its EBIT. 2010-11. Whereas Interest Coverage Ratio of
The lower the interest coverage Consolidated version has decreased during the
ratio, the higher the company's debt year 2011-12 to 4.91% from 8.83% as compared
burden and the greater the to the previous year 2010-11. Although it still
possibility of bankruptcy or default. remains within the ideal ratio limits.


Stock Turnover Ratio Number of time the stock has been The Stock Turnover Ratio of SSL Alone has decreased
turned over during the period and during the year 2011-12 to 2.7% from 3.7% as
evaluates the efficiency with which a compared to the last year 2010-11. Whereas Asset
firm is able to manage its inventory. This Turnover Ratio of Consolidated version has decreased
ratio indicates whether investment in during the year 2011-12 to 9.1% from 10.96% as
stock is within proper limit or not. compared to the previous year 2010-11.

Asset Turnover Ratio The Asset Turnover Ratio of SSL Alone has seen a
continuous decrease during 2010-11 to 3% from 3.4%
of 2009-10 and 2.7% during 2011-12 as compared to
its previous year 2010-11. Whereas Asset Turnover
Ratio of Consolidated version has decreased during
How well a company is utilizing its assets to the year 2011-12 to 1.54% from 1.59% as compared to
produce revenue. the previous year 2010-11.

Current Ratio Firm's commitment to meet financial Although the Current Ratio of SSL Alone is stable
obligation. Heavy ratio is undesirable as throughout the years and has rather increased to 1.5
it indicates less efficient use of funds. during 2011-12 as compared to 1.4 of previous year
2010-11, similarly Current Ratio of Consolidated
version resides 0.5 in 2011-12 and 0.47 in 2010-11 but
does not lie in the ideal range and hence evident to
the fact that company is not using its funds efficiently
and needs improvement in it.


Debt Equity Ratio Although the Current Ratio of SSL Alone has
increased to 0.4 during 2011-12 as compared to
0.2 of previous year 2010-11 similarly Debt Equity
Ratio of Consolidated version resides 0.84 in 2011-
12 and 0.in 2010-11, but does not lie in the ideal
range and hence evident to the fact that there lies
Long term solvency of the Company. a greater risk for creditors because the long term
solvency of the company is not correct and needs a
little attention. over the point.
Quick Ratio There is a shortage in the Quick Ratio of SSL Alone
of the company which during the period 2011-12
lies at 0.12 as compared to last year’s ratio to 0.14,
similarly Quick Ratio of Consolidated version
resides 0.12 in 2011-12 and 0.14 in 2010-11
therefore as far as the ideal ratio is concerned i.e.
0.5 it lacks way behind and hence is suffice to
states that the company’s short term solvency
Short term solvency of the Company. needs immediate attention and improvement.

Return on Capital Employed The company has experienced a decrease in ROCE
(ROCE) of SSL Alone from 19.3% during 2010-11 to 12.8%
during 2011-12.


Return on Net Worth Company has experienced a substantial decrease
(RONW) in RONW of SSL Alone from 26.7% during 2010-
11 to 16.9% during 2011-12.

Short Term Loans and There has been a rise in the Short Term Loans
Advances and Advances provided by the company to
Rs.4,012.47lacs during 2011-12 from
Rs.3,894.82lacs during previous year 2010-11.
Further it is expected to rise to Rs.5,861.1lacs
from April to September 2012.
Long Term Loans and There has been a rise in the Long Term Loans and
Advances Advances provided by the company to
Rs.25,028.65lacs during 2011-12 from Rs. 24,978
.29lacs during previous year 2010-11. Further it is
expected to rise to Rs.27,881.7lacs from April to
September 2012.


Stock in Trade There has been a rise in the Stock in Trade of the
company to Rs.21,204.01lacs during 2011-12
from Rs.15,113.66lacs during previous year 2010-
11. Further it is expected to rise to Rs.21,239lacs
Other Current Liabilities Some of the Other Current Liabilities during
2011-12 have substantially risen from the
previous year 2010-11:
Current maturities of long term borrowings
(secured): Rs.4,000lacs whereas in P.Y it was
Rs.2,000lacs.
Interest accrued and not due on borrowings:
Rs.94.7lacs whereas in P.Y it was Rs.28.21lacs.
Creditors for capital expenditure: Rs.739.2lacs
whereas in P.Y it was Rs.536.10lacs.
Liability for gift vouchers/point award
redemptions: Rs.6,642.21lacs whereas in P.Y it
was Rs.5,758.23lacs.
Further Other Current Liabilities are expected to
rise to Rs.14,652.8lacs from April to September
2012.


Trade Payables There has been a rise in the Trade Payables from
other than MSME’s to Rs.21,656.71lacs during
2011-12 from Rs.24,622.74lacs during previous
year 2010-11. Further it is expected to rise to
Rs.29,586.1lacs from April to September 2012.
Short Term Borrowings Short Term Borrowings during 2011-12 have
increased from the previous year 2010-11:
Loans from banks (secured): Rs.14,406.87lacs
whereas in P.Y it was Rs.10,548.95lacs.
Commercial papers (unsecured): Rs.4,000lacs
whereas in P.Y it was Rs.2,000lacs.
Further it is expected to rise to Rs.21,710.5lacs
The performance of any company depends on PSI score haven fallen to 3.85 during the year
Partnership
the association and relationship it builds with 2011-12 as compared to 4.14 during the
Satisfaction Index (PSI) various vendors/ partners over a period
previous year 2010-11.
of time. To evaluate this satisfaction and
expectation, company has appointed CSMM
(Customer Satisfaction Measurement and
Management), a part of IMRB (Indian Marketing
and Research Bureau) to do an impartial
evaluation of our relationship with various
stakeholders. This helps your organisation
understand the expectations of various business
partners, current strengths and concern
areas thereby help set a clear roadmap for
improvement and better performance.

 First Citizens Club has continued to be one of the main strengths of our business. In the year gone by the programme has
exceeded the 2.5 million mark in memberships, making it one of the largest loyalty membership programs in the country across
sectors.
The company continues to invest in our front and back end processes and systems.
The company created a strong distribution and logistics network, with our four Distribution Centres covering more than
400,000 square feet handling over 400,000 SKUs per year, and working 24x7. The Company believes that the “hub – and-spoke”
model followed by it for its distribution network, will stand it in good stead for the expansion.
Company endeavors to make Shopping experience the differentiator.
The company assesses Customer Care Associates (CCAs) across all levels through assessment centres for promotion
decisions, career planning and succession planning. Company also conducts associate satisfaction survey every year and derive
Opportunities
ASI scores, which helps it in identifying the trust index scores of respect, credibility, fairness, pride with the organisation.
Company benefits from its Promoters’ association with the real estate business and their relationships with developers, which
have helped the company, acquire preferred properties at competitive rates.
The Company imparts special training to its employees to ensure that service is not compromised on. The company’s store
positioning in the “bridge to luxury” segment clearly sets apart its stores from those of the rest of the industry players.
Among the big players in the organized retail space in India, Shopper's Stop has always understood the criticality of
scale, availability and experience, and has been an eager adopter of advanced, cutting edge technology. To help drive its growth
strategy, Shopper's Stop is employing its reporting and analytics capabilities in the areas of merchandising, loyalty
management, distribution and logistics, sales performance, loss prevention, and financial analysis. SAS provided the retailer
with a business analytics framework for reporting and analytics using SAS Enterprise BI Server and SAS Enterprise Miner.
Access to standardized, timely and accurate data from its DRISHTI (Insight) data warehouse project, along with flexible
reporting functionality.

Source: Shoppers Stop Annual Report, 2011-12, www.mbaskool.com, www.cio.in, www.sas.com,

The company will be in expansion phase over next 36 months which will be a critical time as far as execution risk is concerned.
Rent is one of the largest components in a retail business fixed costs and the case is no different for the Company. Rentals are
expected to harden once again in the near term.
Slowing expansion due to dependence on real estate developer for completing projects during slowdown.
Certain levies / cascading effect of taxes on the business which are proving to be a very large burden as there are no modes for
the industry to recover or pass on these levies. Delay in the roll out of the GST regime is also a matter of concern.
The Company has invested in other entities and lower than expected returns from these entities will have an impact on the
cash flows and consolidated results of the Company
It has lesser promotional strategies on both Above the Line and Below the Line level compared to global leaders.
Operating expenses of the company have substantially risen throughout the years which had its adverse effects on the profits
of the financials of the company.
Severe consistent heavy hikes in Finance Charges have been proved to be a big matter of concern for the company. The needs
an immediate attention over the issue before it could consolidate its adverse effects on profits of the company.
 The funds available by the company are not being utilized by it in an efficient manner which reflects in its Current Ratio.
Company has both provided and obtained heavy financing and borrowings for itself as well as for its Associate companies
which until the current stage has failed to show its purpose and worth which takes a heavy toll out of the profit as a part of
interest charges.
The Net worth of Joint Venture Companies of SSL, i.e. Nuance Group (India) Private Limited and Timezone Entertainment
Private Limited has substantially been eroded as at 31st March, 2012. Based on the business plans of these companies and the
business valuation by an independent valuer, no provision for any loss is currently considered necessary in these financial
statements.
Subsidiary of SSL, Hypercity Retail (India) Limited continues to make losses and the accumulated losses of Rs. 36,402.66lacs as
at 31st March, 2012 have substantially eroded its Net worth as at the year end. Based on the Business plans, opportunities and
business valuation by an independent valuer, the Company considers that there is no loss for which a provision is currently
necessary in these financial statements.


The company is expecting to launch into its next expansion phase in the next 36 months. The Company’s strategy to increase
the number of departmental stores, and therefore improve city wise penetration in new cities, increase market share in existing
cities through additional new stores in those cities, and new stores in Tier-II cities, remains unchanged.
Hypercity which is a 51% subsidiary of the Company has shown encouraging performance, with an overall sales growth of
27.5% and like to like sales growth of 9% for the year.
Company has diversified into multiple formats viz, HomeStop which retails hard and soft furnishing, M.A.C. and Estee Lauder
which retails high end cosmetic products, Clinique which retails skin care products, Mothercare which retails infant and kids
merchandise and airport retailing, by tying up with The Nuance Group AG of Switzerland. The Company has also made a
successful foray into internet retailing through its e-retailing portal. The Company looks to focus and expand these formats.
Company believes that by it’s presence across all lifestyle categories in the departmental format, it’s strong brand value and it’s
presence in the books and music segment, it is best placed to bring in international brands into the country, thereby enriching
the product bouquet for it’s customers and in turn increasing opportunities for product diversification and profit enhancement.
After the clearance of FDI from the Rajya Sabha , Shopper Stop because of having an early presence in some International
brands may be have an upper hand in competing with the Global multibrand retail companies than its local rivals.
Preferred partner for international brands in various categories due to diversified presence.


Economic slowdowns have a direct impact on consumption. Retail, being the end service provider of consumption in the
supply/value chain, is bound to face difficulties in an environment of economic slowdown.
With India continuing to be an attractive retail market, the Company expects many new entrants into the sector, thus
increasing competition, also among existing rivals there is intense rivalry for new locations and quality real estate, therefore it
sets up the foundations for increased intensity of competition among existing rivals.
With the clearance of FDI from the Government of India, Shopper Stop together with the local multibrand retailers like Wills
Big Bazaar, Spencers, etc. Will also have to face severe competition from the global behemoths like Wallmarts.
Faced with increasing competitive pressure for customer wallet share, Shopper's Stop will have to improve customer
satisfaction and loyalty, increase its breadth of merchandise and expand store operations into new markets, while maintaining
profitability.


RISK POINTS RAISED BY THE AUDITORS
Following risk points were raised by the Auditors for the financial year 2011-2012:
• According to the Auditor’s opinion, a substantial part of fixed assets has not been disposed off by the Company during
the year.
• The Company has granted unsecured loans to one party during the year. At the year-end, the outstanding balance of such
loans aggregated Rs.8,730.68lacs (including interest) and the maximum amount involved during the year was
Rs.16,500.00lacs. The rate of interest and other terms and conditions of such loans are, in the Auditor’s opinion, prima
facie not prejudicial to the interests of the Company.
• According to the Auditor’s opinion the terms and conditions of the guarantees given by the company for loans taken by
its joint venture companies from banks are not prima facie prejudicial to the interests of the Company.
• Auditor’s attention is invited to Note 31 to the Consolidated Financial Statements regarding non-provision of service tax
for the period 1 June 2007 to 31 March 2010, on renting of immoveable properties given for commercial use, aggregating
Rs. 2,010.90lacs, pending final disposal of the appeal filed before the Honourable Supreme Court, inter-alia, challenging
the retrospective levy of the service tax. The matter is contingent upon the final outcome of the litigation.
• Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect
from 1 June 2007 by the Finance Act, 2010, the Company has, based on a legal advice, and challenged the said levy and,
inter-alia, its retrospective application. The Honourable Supreme Court has passed an interim order dated 14th October,
2011, with regard to the levy of service tax on immovable properties rented out for commercial use including its
retrospective applicability from 1st June, 2007 in compliance of which, the Company has made an aggregate deposit of
Rs.1,824.88lacs in respect of the liability for such service tax up to 30th September, 2011. From October 2011, the
Company is accounting and paying for such service tax regularly as per directives of the Supreme Court. Pending the final
disposal of the matter, the Company continues not to provide for the retrospective levy aggregating Rs.1,659.56lacs for
the period 1st June, 2007 to 31st March, 2010.


COMMON STOCK COMPARISON (RS. In Crs.)
S no. Company Name Financials as on… Share Shares Market Net Debt Expected
Price Outstanding as Cap(Rs.) 2012(Rs.) Value(Rs.)
on March 2012
1 Tata Industries 31st March 2012 228.6 88.8 20,299.68 (961.2) 19,338.48
(Consolidated)
2 Pantalone Retail 30th June 2011 306.65 20.75 6,362.69 2,334.7 8.697.39
(Standalone)*
3 Bata (Consolidated)* 31st December 530.45 6.43 3,408.87 (190.00) 3,218.87
2011
4 Shopper's Stop 31st March 2012 389.15 8.26 3,212.91 367.69 3,580.59
(Consolidated)
5 Gitanjali Gems 31st March 2012 325.00 9.11 2,960.75 3,291.08 6,251.83
(Consolidated)
6 Trent (Standalone) 31st March 2012 949.20 2.72 2,586.52 (29.61) 2,556.91

7 Jubiliant Foodworks 31st March 2012 1,168.15 6.51 7,602.08 (12.94) 7,589.14
(consolidated)
8 Provogue 31st March 2012 14.55 11.44 166.39 273.27 439.65
India(Standalone)

Source: Danodia Capital Advisors Report July 2012
Source:As per research reports available by leading brokers like Goldman Sachs, Citi Group etc.

COMMON STOCK COMPARISON (RS. In Crs.)
S no. Company Name Sales 2012 Sales 2013 EBITDA 2012 EBITDA 2013 Net Income Net Income 2013
(Rs.) (Expected) (Rs.) (Expected) 2012 (Rs.) (Expected) (Rs.)
(Rs.) (Rs.)

1 Tata Industries 8,848.43 10,295.5 834.02 906 600.15 675.8
(Consolidated)

2 Pantalone Retail 4,778.9 5,504.4 505.3 572.90 55.80 75.40
(Standalone)*
3 Bata 1,812.00 2,132.70 300.20 390.60 185.40 246.60
(Consolidated)*

4 Shopper's Stop 2,737.41 3,444.00 104.80 178.40 19.01 65.00
(Consolidated)

5 Gitanjali Gems 12,498.27 14,050.50 807.59 970.80 487.25 531.00
(Consolidated)

6 Trent (Standalone) 821.79 923.27 NA 99.34 47.26 55.06

7 Jubiliant 1,018.64 1,430.20 187.69 270.40 103.29 155.50
Foodworks
(consolidated)
8 Provogue 609.59 696.55 59.69 103.03 25.03 47.85
India(Standalone)

Source: As per research reports available by leading brokers like Goldman Sachs, Citi Group etc.

COMMON STOCK COMPARISON
S no. Company Name EBITDA PAT (EV/Sales) (EV/Sales) (EV/EBITDA) (EV/EBITDA) (P/E) 2012 (P/E) 2013E (Rs.)
Margin Margin 2012 (Rs.) 2013E 2012 (Rs.) 2013E (Rs.) (Rs.)
(%) (%) (Rs.)

1 Tata Industries 9.43 6.78 2.19 1.88 23.19x 21.34 33.82 30.04
(Consolidated)
2 Pantalone Retail 10.57 1.17 1.82 1.58 17.21 15.18 114.03 84.39
(Standalone)
3 Bata 16.57 10.23 1.78 1.51 10.72 8.24 18.39 13.82
(Consolidated)
4 Shopper's Stop 3.83 0.69 1.31 1.04 34.17 20.07 169.01 49.43
(Consolidated)
5 Gitanjali Gems 6.46 3.90 0.50 0.44 7.74 6.44 6.08 5.58
(Consolidated)
6 Trent 0 5.75 3.11 2.77 0 25.74 54.73 46.98
(Standalone)
7 Jubiliant 18.43 10.14 7.45 5.31 40.43 28.07 73.6 48.89
Foodworks
(consolidated)
8 Provogue 9.79 4.11 0.72 0.63 7.37 4.27 6.65 3.48
India(Standalone)

Source: As per research reports available by leading brokers like Goldman Sachs, Citi Group etc.

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