SMC Global Securities Limited

5️⃣Capex is the Moat (or the Grave) Store count and expansion drive scale, but come with high capital burn 🔷Watch for Capex to Sales Ratio — tells you how asset-light the model is 🔷Monitor Debt-to-Equity and Lease Liabilities under IndAS 116 🔷 Growth funded by debt = red

4️⃣Margin is Everything in Retail Most retailers operate on single-digit net margins 🔷Your ₹1 profit depends on 99 paise of cost control 🔷Premium & luxury retailers get better margins, but face slower scale 🔷Value retailers win through volume but bleed in competitive

6️⃣Size is a moat in Retail In this business, scale = survival. Larger players benefit from: ✅Better vendor terms ✅Lower logistics cost ✅Higher brand recall ✅Faster breakeven 👉 Unique insight: “Market share is the only real moat in retail”

Segments Revenue: 📍Madura Fashion & lifestyle = ₹7,794 Cr 📍Pantaloons = ₹4,328 Cr 📍 Ethnic and Others = ₹2,190 Cr FY30 Target: 2x–7x growth in all segments. 👉 Lesson: Premiumisation + Diversification = Long-term compounder

And that’s a wrap! If this helped you understand the retail sector better, RT & follow for more deep dives into stocks, sectors & strategy.

8️⃣Case Study: Aditya Birla Fashion & Retail (ABFRL) A retail empire with over 4,400 stores. From value to luxury, they do it all: • Louis Philippe • Van Heusen • Pantaloons • Sabyasachi • Reebok India 🔷 FY24: ₹13,996 Cr revenue, 4,492 stores, 11.9 Mn sq. ft space https://t.co/jDuf9lHa4O

Track these: 📌 Debt-to-Equity 📌 Lease Liabilities (IndAS 116) 📌 Cash Conversion Cycle 📌 Capex-to-Sales = Asset-light vs. Asset-heavy 👉 Lesson: Asset-light, low-debt retailers scale better in downturns.

Margins are razor-thin—especially in value retail. 📉Gross Margin = Pricing Power 📉EBITDA Margin = Cost Control 📉Net Profit Margin = Final efficiency 👉 Lesson: Every 1% matters—look for private labels & supply chain edge.

9️⃣What to watch while investing Ask these before buying any retail stock: ❓Is SSSG improving? ❓What’s the PSF vs. peers? ❓How leveraged is the balance sheet? ❓Are they entering Tier 2/3 cities? ❓Private labels or just reselling? ❓Digital + Offline mix? 👉The best