See contraction in operating margins in next quarter: Chandrashekar Navalkar

ET Now: If we do not take into account the consolidation of HyperCity per se, on an apples to apples basis, how has the quarter been?

Chandrashekar Navalkar: Actually if you look at a like-to-like basis, our quarter has been very good. In Shoppers Stop, we have a growth of 14% in this quarter. So, it has been quite satisfying despite all the concerns, which have been on the inflation or the excise duty implementation on the apparel. Apart from that, we have had a good quarter. We had two stores opening, Durgapur and Siliguri, so we have actually expanded our base in West Bengal now. First Citizens have crossed the 2 million mark and account for 73% of the revenue of the company. So, it has been overall a satisfying quarter for Shoppers Stop and HyperCity added on in the quarter of July to September last year. As you rightly said, it is not comparable, so to that extent, the financials would look a bit lower than last year on the consolidated basis. On the standalone basis, it is very good. We have had a 22% growth on the top line and about 69% growth in the profit before tax. So it has become 22% growth on the PAT level.

ET Now: Contraction in the margins, do you think that will continue?

Chandrashekar Navalkar: The contraction in the margins is because of various things, it is not because of any fall. In the operating margins, yes, in the gross margin, we would see an improvement as we proceed during the year. In the operating margins in the next quarter also, we will see a contraction because again it is not comparable with HyperCity in but overall we would see an improvement of about generally in the Shoppers Stop Ltd. at about 8% is what we would continue to expect and improve.

ET Now: What is the kind of improvement purely in EBITDA margins that you would see if at all in the next couple of quarters?

Chandrashekar Navalkar: We would see an improvement significantly. We do not give a future guidance on that but definitely on the operating margins, we would see an improvement.

ET Now: There is a lot of talk over the last two quarters about the norms of multi-brand retail that would come in and how that would impact the sector. There has been a bit of a dillydally as far as the policymaking on that goes as well. How soon would that come about? How beneficial if at all would it be for shoppers?

Chandrashekar Navalkar: Actually we would not know when it would come about. It is very much on the table for quite sometime. If it comes and yes, it will help improve the infrastructure in the country for the retail, for the logistics, more importantly the backend because a lot of money, which should flow into retail. One of the most important part of retail is also the real estate, if we see investment in that sector, it would actually will help with improvement and expansion in this particular sector.