New Delhi, December 07, 2018: Kishore Biyani feels Future Consumer could be the engine powering the entire business in coming years
Biyani has been in talks with Amazon for a possible stake sale in Future Retail, allowing the e-commerce giant to enter the group.
According to reports published in moneycontrol.com the Future group CEO feels Future Consumer could be the engine powering the entire business in coming years. The FMCG arm achieved sales of Rs 3,000 crore in FY18 from Rs 1,700 crore in FY16, clocking a compound annual growth rate (CAGR) of 32 percent over three years.
The company also reported positive earnings before interest, tax, depreciation, and amortization (EBITDA) in FY17 at Rs 20.7 crore. In FY18, its EBITDA stood at Rs 66.4 crore. Analysts expect the company to turn profitable after tax by FY20, the report said.
Earlier, Biyani had said that he expects the unit to contribute 70 percent to the Future Group’s consumer goods sales by 2022. He added that prospects for companies in the sector were robust given the fact that per capita consumption of FMCG products in India was low.
Future Consumer owns over three dozen brands, including Sunkist, Karmiq, Golden Harvest, Fresh & Pure, Premium Harvest and Tasty Treat, spread across 70 categories and a slew of home and personal care products. Its products are also available in other stores such as Star Bazaar, Foodworld, Nature’s Basket and so on.
Experts told the paper that the company derived 18-20 percent of its topline from sale of products in other outlets in Q2 FY19. Its products reached 1.14 lakh general trade outlets in the first half of FY19, an about 20 percent jump over FY18 at 96,000 stores.
Analysts expect the coming quarters to be strong for Future Consumer. “The company is well poised to continue its growth trajectory, given its innovative product portfolio, new launches and strong distribution network,” Jimeet Shah and Kimberly Paes of Mumbai-based brokerage Indsec Securities and Finance told the paper according to moneycontrol.com
Biyani had also painted an aggressive future for the company based on a series of launches, brand tie-ups and manufacturing.