Key negatives included modest like-to-like (LTL) sales growth of 3.7% y-o-y in departmental; impacted due to closure of four key stores for renovation (otherwise LTL sales growth would have been ~8% y-o-y), subdued sentiment till May and lack of good movie releases in Q1FY15 (PVR saw 14% y-o-y drop in LTL footfalls) and 14% y-o-y LTL decline in Hypercity footfalls due to resizing of stores. The company will be one of the key beneficiaries of recovery in urban consumption.
SSL continues to execute better than most peers and will be one of the key beneficiaries of recovery in urban consumption. We maintain buy with TP of R441. All big stores have been renovated in Q1FY15 itself, precluding further closures. LTL growth is expected to be 7-8% y-o-y in FY15E. The management expects to achieve Ebitda breakeven in Hypercity business in FY15.