Lulu Lucknow revenue soars 57% to Rs547cr; Net profit still eludes

Hypermarket breaks even in FY24; Mall project cost increased 21% to Rs1,640cr 

LUCKNOW: Lulu India Shopping Mall Pvt Ltd  (LISMPL), the company that runs Lulu Lucknow Mall, may take a year or two more to taste a net profit, but it’s doing well on the business front as the revenue has surged by 57 per cent in the financial year 2023-24 (FY24) to Rs547 crore compared with Rs349 crore in the previous year.

However, the company reported loss after tax for FY24 and more importantly, as India Ratings reports, the cash flows were insufficient to cover the debt repayment obligations completely.

In response to a query from businessbenchamark.news seeking to quantify the loss, the agency was non-obliging.

The hypermarket division achieved a breakeven in FY24, whereas the other two divisions – mall, and amusement & entertainment centre Funtura – managed to report an earnings before interest, taxes depreciation and amortisation (EBITDA) profit in FY24.

“The project cost of the mall increased 21 per cent to Rs1,640 crore, due to changes in its scope, pandemic-related delays in execution and an increase in interest rates during the construction period,” the rating agency noted in its ‘ratings rationale’ report.

The cost overrun was funded by quasi-equity in the form of unsecured loans of Rs283 crore from the group company. 

EBITDA at Rs123cr

With the ramp-up in leasing and operations of the company, Lulu Lucknow Mall hopes its revenue is likely to grow on a year-on-year basis. In FY24, the company earned an EBITDA of Rs123 crore against high debt obligations of Rs174 crore, thereby necessitating support from the promoter group.

The company carries a gross debt of Rs1,185.17 crore in its books as of March-end, 2024, and hence it has incurred Rs116.05 crore as finance cost during 2023-24 (FY24) to service the debt.

LISMPL is a single asset entity, which houses the Lulu Mall, Lucknow. It is part of the India-operations of the Gulf-based Lulu Group promoted by Yusuf Ali, which is one of the largest players in retails real estate in Middle East.

The company was incorporated in May 2016 to set up a shopping mall in Lucknow, Uttar Pradesh. The construction of Lucknow Mall was completed in March 2022 and was opened to public in July 2022.

The mall derives revenue from three major segments – leasing of shops in the mall, departmental store operations under the Hypermarket division (under which it runs its fashion retail segment -LuLu Fashion and its electronic retail segment – LuLu Connect) and its fun and entertainment centre, Funtura.

Since becoming operational in July 2022, the mall has witnessed steady growth in terms of occupancy, according to India ratings.

Leased occupancy at 97%

As of March 2024, the mall had leased occupancy of 97 per cent. The mall consists of multi-tenanted brands across various categories such as anchor/mini-anchor, vanilla brands, food and beverage, entertainment, food court and a multiplex. 

Apart from Lulu Lucknow, the Lulu group runs three other malls- Lulu Kochi, Lulu Bengaluru and Lulu Thiruvananthapuram, all under a different company called Lulu International Shopping Mall Pvt Ltd.

The promoters of Lulu Mall Lucknow have infused Rs745 crore, which largely comprised Rs245 crore of loan backed by fixed deposits by the promoters, Rs338 crore of loan from its sister concern and Rs137 crore in the form of equity.