Operating income more than doubles
CL Jose
KOCHI: Riding on a very strong growth in operating income, Lulu International Shopping Malls Pvt Ltd (LISM) has returned to profitability by logging a net profit of Rs17.60 crore for 2022-23 (FY23) after posting a loss of Rs166.56 crore for the previous year (FY22).
The financial year 2022-23 (FY23) saw LISM’s operating income soar by more than 116 per cent from Rs1327.99 crore in FY22 to Rs2873.22 crore in FY23. The current financial year (FY24) also looks promising for Lulu Malls as it has earned an encouraging operating income of Rs829 crore for the first quarter ending June 30, 2023 (Q1-FY24).
According to a document released by CARE ratings, , LISM will invest Rs3,000 crore over FY24-FY26 period to expand the network by opening nine hypermarkets and two retail malls. This capital expenditure is likely to be funded by debt, according to the CARE statement.
However, the group has recently stated that it would invest Rs10,000 crore in India in the next three years to set up hypermarkets, destination shopping malls and food processing units. Apart from LISM, the Lulu group has other operations that oversee investments in different parts of India.
LISM operates Lulu malls and Lulu hypermarket in Kochi, Thiruvananthapuram, Bengaluru and Hyderabad (commenced operations in September 2023). The company also operates standalone hypermarket in Flacon City mall (in Bengaluru), Maradu and Coimbatore.
The flagship mall of the group, Lulu Mall in Kochi, has been operational for close to a decade and has emerged as prominent shopping destination in the city.
“Due to its strong positioning, the mall and hypermarket continues to exhibit strong occupancy level and trading density translating into stable cash flows,” it said.
The mall at Thiruvananthapuram is located opposite to the airport and commenced operations from December 2021. The leasing area is almost fully occupied, and trading density of hypermarket has also reached at satisfactory levels.
Bengaluru sales remain subdued
The Bengaluru mall, which is taken on lease by LISM, commenced operations from October 2021. Unlike the favourable response received for its hypermarket in Kerala malls, sales in Bengaluru hypermarket have been low due to stiff competition from other hypermarkets and online platforms.
Other malls and shops have started operations only recently and therefore operational track record is yet to be established.
CARE Ratings Ltd (CARE Ratings) expects that based on its strong brand recall, company would continue to maintain superior trading density and occupancy levels, especially at Kerala-based assets.
LISM is part of the Emke (Lulu) group, which has business interests in shopping malls, hospitality, commercial office space etc, primarily in Gulf countries.
