Investing in Future Enterprise Ltd: Gopal Kavalireddi's Perspective
The Indian retail sector has seen considerable growth and transformation over the past few years, and Future Group is at the forefront of this evolution. With a notable presence in both offline and online retail.
Introduction to Future Enterprise Ltd
Future Enterprise Ltd (FEL) plays a crucial role in the Future Group's retail ecosystem. It is the backbone of the retail group, providing essential infrastructure for the group's retail operations. FEL's main business involves developing, owning, and leasing retail infrastructure for the group. Additionally, it holds investments in several subsidiaries, joint ventures, and other entities that cater to various aspects of the consumption space.
FEL's Performance in the Market
Future Group's portfolio has seen an impressive performance in the stock market in 2017, with all listed entities delivering returns of more than 200%. Among these, Future Enterprise Ltd has managed a return of 210%. This performance is noteworthy given the diverse operations within the group.
Kishore Biyani, the pioneer of retail in India, has played a key role in driving the transformation within Future Group. With its first-mover advantage in supermarkets and hypermarkets, the group has continued to innovate and adapt to the growing online retail landscape.
Current Financial Position and Future Prospects
Despite facing challenges such as high interest costs and depreciation, FEL is moving towards profitability. The company is close to breaking even on Profit Before Tax (PBT), and it is expected to turn profitable in the near future (Q3 or Q4).
The company’s main assets include its retail space, which is leased to group companies for setting up stores, and investments in various subsidiaries and joint ventures. These include companies involved in supply chain solutions, media properties, e-commerce, and more.
Subsidiaries and Joint Ventures
Future Supply Chain Solutions Ltd: Provides integrated supply chain management, warehousing, and logistics solutions.
Future Media India Ltd: Offers media services through its television and activation platforms.
Futurebazaar India Ltd: Operates as the e-retailing arm of the Future Group, providing an online shopping experience through its e-portal.
Future E-Commerce Infrastructure Ltd: Focuses on capturing the digital consumption space through internet-based and technology-driven platforms.
Bluerock eServices Private Ltd: Dealers in furniture and home furnishings.
Work Stores Ltd: Entries in office supplies and equipment.
Office Shop Private Ltd: Distribution services.
Galaxy Entertainment Corporation Ltd: Operates family entertainment, gaming centers, food courts, and restaurants in shopping malls.
Apollo Design Apparel Parks Ltd Goldmohur Design Apparel Park Ltd: Developments and restructuring of Mills with the National Textile Corporation.
Future Generali India Life Insurance Company Ltd Future Generali India Insurance Company Ltd: Joint ventures in the insurance sector, providing various insurance products.
Shendra Advisory Services Private Ltd Sprint Advisory Services Private Ltd: Advisors to the insurance joint ventures.
Conclusion
Future Enterprise Ltd is well-positioned to deliver continuous returns as it unlocks the value of each business individually or through stake sales. The company's diverse operations across various sectors make it a promising investment opportunity. Prospective investors should consider Gopal Kavalireddi's insights on the future of Future Enterprise Ltd and its potential for profitability.
Financial Data: Illustrations from and the company's financial reports (2016-17 balance sheet).