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The company’s revenue growth was driven by an 11% year-on-year (y-o-y) store addition and recovery in revenue per square foot, even amidst weak same-store sales growth (SSSG). Despite the employee costs escalating by over 20% y-o-y, outpacing the topline growth, the company managed to maintain its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin at pre-COVID levels. This was accomplished through stringent cost control measures.
However, the firm faced challenges due to a weaker product mix stemming from lower contributions from general merchandise and apparel. This is expected to be offset by a rebound in the food and grocery segment and control over other expenses. The reworking of the apparel portfolio could impact discretionary margin while value formats like Zudio and Reliance Trends reduce consumer appeal of Hypermarts.
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