Motilal Oswal - MOSL: RETAIL-Steady growth ahead-Prefer TRENT, ABFRL, FLFL and FRL

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Motilal Oswal

Aliasgar Shakir

EUR 120.00 For Business Accounts Only

MOSL: RETAIL-Steady growth ahead-Prefer TRENT, ABFRL, FLFL and FRL

Retail: Steady growth ahead; Prefer TRENT, ABFRL, FLFL and FRL

With 4QFY19 earnings season behind, we assess the quarter gone by in this report, discussing our channel checks, margin improvement opportunities and our stock recommendations.

4QFY19 earnings performance of our retail coverage universe was a mixed bag. While TRENT, FLFL, and FRL performed well, DMART, VMART, and ABFRL witnessed good revenue growth, but at the cost of margins.
Though 1QFY20 was off to a slow start, our recent channel checks indicate that the trend has now reversed. May'19 witnessed a bounce-back in growth coupled with upbeat market sentiments and favorable outlook.
TRENT, ABFRL, FRL, and Shopper's Stop should see healthy margin improvement due to increasing scale, mix of private labels and recovery from loss-making formats. But, margin improvement cycle for DMART, VMART, and FLFL may be largely behind.
We continue to prefer companies with the value fashion format and the food and grocery (F&G) segment. Amongst these, our top picks are ABFRL, TRENT, FLFL and FRL.

12/06/2019 1 EN

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Aliasgar Shakir

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MOSL: RETAIL-Steady growth ahead-Prefer TRENT, ABFRL, FLFL and FRL

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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