Provogue
(India) is a major player in the branded retail
segment and also has a presence in retail development and mall management. The
company operates the retail segment under the brand Provogue and the real estate
business under the brand Prozone. With the revival in consumer offtake, we
expect its retail business to get back to the higher growth trajectory. While
the retail business remains the key growth driver, we expect prozone to
contribute positively, going ahead. Prozone, with three projects under
execution, appears to be in a sweet spot, as these properties would enable
Provogue to earn annual rental income and contribute to its earning growth.
Provogue’s
retail operations have a pan-India presence with 125 Provogue studios and mega
studios (premium segment) and two Promart stores (bargain department stores).
With easing rentals and the improving macro scenario, Provogue has stepped up
its retail expansion plans. It plans to add 15 Provogue stores and four to six
Promart stores annually.
Prozone,
(75% subsidiary of Provogue), through its 70% held SPV (Prozone Liberty
International) plans to build about 15 million sq ft of malls/offices/hotels in
Tier II cities of India. Prozone plans to build malls in Aurangabad, Coimbatore,
Nagpur, etc. Its Aurangabad property that has a saleable area of 0.83 million sq
ft is expected to commence operations in June 2010. Nearly 60% of this property
is pre-leased at an average rental of Rs 47 and would add significantly to the
revenue and profitability of the company from FY11 onwards.
With
improving consumer sentiments, the retail industry is expected to register
enhanced growth momentum. Provogue, with its pan-India presence and strong
expansion plans with lower cost structure owing to downward revision of lease
rentals of its few properties would be able to enhance its profitability, going
ahead.
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