Equity Research Report

November 21, 2015

Store One Retail India Ltd

BSE CODE: 532679

NSE CODE: STOREONE

SECTOR: TEXTILE READYMADE APPRALS

CMP:

Rs 29.10

Recommendation :

BUY

Target Price :

Rs 60

Target Period:

12 Months

Stock Details

Market Cap

Rs 91.22 Crore

52- wk HI/L

Rs 53.30– Rs 22.70

Avg.Volume (Monthly)

42759.33

Face Value

Rs 10

Historical Prices

1 week

1 month

3 month

6 month

1 year

BSE

29.65

34.00

31.10

28.15

41.10

Gain/Loss

11.47%

-2.79%

6.27%

17.41%

-19.5%

NSE

29.60

33.75

30.70

28.05

40.80

Gain/Loss

11.49%

-2.22%

7.49%

17.65%

-19.1%

Revenue (Rs Crore)

134.37

150.00

117.83

100.00

89.24

50.01

50.00

3.48

0.00

Mar'11

Mar'12

Mar'13

Mar'14

Mar'15

EBIDTA (Rs Crore)

60.0

43.9

45.4

42.2

40.0

25.3

-2.4

0.0

Mar'11

Mar'12

Mar'13

Mar'14

Mar'15

-20.0

Profit after

Tax (Rs Crore)

60.0

37.7

35.2

40.0

23.2

20.0

11.8

0.0

Mar'11

Mar'12

Mar'13

Mar'14

Mar'15

-20.0

-40.0

-35.2

About

Store One Retail India Ltd (SORIL) was incorporated in 2005. The company is promoted by the Indiabulls group. The retail chain operates lifestyle stores and hypermarts and has a presence in tier I, tier II and tier III cities of India. These cities are Mumbai, Pune, Nagpur, Ahmedabad, Jaipur and Indore. The company has more than 44 stores across these

cities. The company has total retail operation area of ~596,000 sq ft. SORIL has adopted multiple formats, one of them being a chain of lifestyle stores under the brand “Store One” and hypermarts under the “Happy Store” brand. The lifestyle stores offer an assortment across apparels, accessories, fragrances, cosmetics, footwear, home furnishing and decor products of various brands, including "Lee", "park Avenue", "Van Heusen", "Puma", etc. The hypermarts sell groceries

and other daily required products. As of FY10, the company has eight lifestyle stores and 36 hypermart stores.

Financial Highlights

Company’s top line performance was better than previous year.

Company’s Revenue from Operations increased to 134.37 Crore as against 117.83 Crore for the corresponding previous year.

The EBIDTA for the year was slightly lower by -7.03% to 42.2 Crores as

compared to 45.4 Crores in the corresponding previous year.

The Profit before Tax was 23.27 Crore and Profit After tax was 23.24Crore.

The market capitalization of the Company increased by 31%, from ` 59.62 crores as at March 31, 2014 to ` 78.11 crores as at March 31, 2015. The price to earnings ratio was 3.37 times as at March 31, 2015 (PY 1.71 times).

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November 21, 2015

Store One Retail India Ltd

Ratio Analysis

Company Industry

Sector

Valuation Ratios

P/E Ratio

6.79

25.45

21.88

Beta

1.9

0.78

0.9

Price to Sales

0.62

2.94

2.56

Price to Book

0.56

3.08

2.43

Price to Cash Flow

3.36

17.54

13.31

Payout Ratio

0

31.5

24.65

Growth rates

Sales vs Qtr. 1 Yr. Ago

17.38

10.36

4.3

Sales vs TTM 1 Yr. Ago

19.41

24.56

6.13

Sales - 5 Yr. Growth Rate

51.61

6.83

10.08

Financial strength

Quick Ratio

1.13

2

1.81

Current Ratio

1.14

2.75

2.31

LT Debt to Equity

60.98

20.15

69.46

Total Debt to Equity

60.98

30.68

90.65

Interest Coverage

11.59

18.36

23.65

Profitability Ratios

Gross Margin

99.71

31.61

35.82

Gross Margin - 5 Yr. Avg

96.66

34.02

29.59

EBITD - 5 Yr. Avg

36.2

22.97

19.5

Operating Margin

15.87

14.36

15.72

Pre-Tax Margin

8.99

14.72

13.83

Net Profit Margin

8.97

9.97

9.21

Effective Tax Rate

0.15

30.78

31.39

Efficiency

Receivable Turnover

2.9

10.36

14.19

Inventory Turnover

1.05

50.93

19.45

Asset Turnover

0.25

0.78

0.66

Management effectiveness

Return on Assets

2.21

6.06

4.93

Return on Investment

5.57

9.62

6.73

Return on Equity

8.45

12.17

10.48

Investment Rationale

Indian retail sector has been at the helm of India's growth story. The sector accounts for 22% of the gross domestic product (GDP) and contributes to 8% of the total employment. Indian Retail sector continues to grow despite irregular global economic trends. A report has estimated that the total retail sales in India to grow from $411 billion in 2011 to $804 billion by 2015. Robust economic growth, high disposable income with the end-consumer and rapid construction of organized retail infrastructure are key factors behind the forecast. SORIL comes under organized retailing sector.

Organized retailing refers to the format wherein consumers buy goods in a similar purchase environment across locations. Verticals such as food and grocery, apparels, furniture and furnishings etc, comprise the entire basket of retail offerings. The organized retail market grew at a much faster

rate of during past few years on the back of aggressive expansions by new entrants as well as existing players.

However, the sector for past few years has been battling against several challenges, including high consumer price inflation, currency fluctuations, and strict FDI policies. To boost growth in the sector, India allowed 100% FDI in

single-brand retail in 2012 with a requirement of 30% of items sold to be sourced from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors, while it allowed 51% FDI in multi-brand retail segment with the similar condition. The new government although gave a nod to 100% FDI in single-brand retail, it simply dismantled the reform of 51% FDI in multi-brand retail in line with its manifesto on the basis of which we won the elections.

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Equity Research Report

November 21, 2015

Store One Retail India Ltd

Balance Sheet (INR Crores)

Source of Funds

Mar’15

Mar’14

Total Share Capital

30.57

26.17

Equity Share Capital

27.60

23.20

Reserves

126.50

94.63

Preference Share Capital

2.97

2.97

Networth

157.07

124.16

Secured Loans

38.61

13.04

Unsecured Loans

27.00

0.00

Total Debt

65.61

13.04

Total Liabilities

222.68

137.20

Application Of Funds

Mar’15

Mar’14

Gross Block

205.51

161.12

Less: Accum.

41.87

29.34

Depreciation

Net Block

163.64

131.78

Capital Work in Progress

0.00

0.00

Investments

0.00

0.00

Inventories

0.39

0.17

Sundry Debtors

58.61

31.16

Cash and Bank Balance

3.08

2.48

Total Current Assets

62.08

33.81

Loans and Advances

55.86

15.66

Fixed Deposits

0.00

0.00

Total CA, Loans &

117.94

49.47

Advances

Current Liabilities

57.83

43.39

Provisions

1.04

0.67

Total CL & Provisions

58.87

44.06

Net Current Assets

59.07

5.41

Total Assets

222.71

137.19

Contingent Liabilities

3.76

3.18

Book Value (Rs)

55.83

50.79

Technical Outlook

SORIL 12 month Stock Performance

SORIL Performance Against Nifty

Peer Analysis

Name

Last

Market

Sales(Cr)

Net

Total

Price

Cap.(Rs)

Profit

Assets

Page Industries

13,044.00

14,549.11

1,543.02

196.02

521.17

Kitex Garments

698.00

3,315.50

511.10

98.52

404.62

KPR Mill

833.05

3,139.17

2,080.48

145.98

1,438.65

Monte Carlo

439.00

954.04

582.58

59.77

-

Zodiac Clothing

255.50

498.71

325.01

9.50

233.09

Pearl Global In

220.40

477.47

623.99

10.22

402.36

Indian Terrai

660.00

474.29

290.41

17.98

165.68

Lovable Lingeri

254.00

426.72

172.49

19.72

190.59

Maxwell Ind

61.90

409.02

261.11

7.01

193.68

Gokaldas Export

64.95

225.74

1,070.12

34.36

445.23

Momai Apparels

86.00

124.09

--

--

-

Store One

32.75

90.39

134.37

23.24

222.71

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Equity Research Report

November 21, 2015

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