Sector Update | 4 June 2021

Retail

Retail

Grocery Retail - Changing landscape

Competition in the Online Grocery space coming to the forefront

Unlike most other Retail categories, Grocery has remained largely insulated from the

Online disruption. However, the prominence of Online players and their growing scale in

the last few years makes us sit up and take notice. In this report, we discuss the growing

scale of Online players, market opportunity, challenges, evolving business models, and the

competitive position of offline retailers.

e-Grocers turn sizeable, no more minnows

Historically, e-Grocery hardly garnered single-digit share of the overall grocery market

in India and globally, with multiple players trying to make inroads with limited success.

In the last few years, the growth of e-Grocery players have certainly made us sit up

and take notice. While penetration remains low, the online grocery market has grown

30x in the last 7-8 years to reach USD3b. Viewed differently, it is cumulatively the

third largest Modern Retail player in the market behind DMart and Reliance Retail.

This space is now expected to grow over 59% CAGR to USD18b by CY24E. India has

154m online transacting households in CY20, with 130m already using e-Grocery

platforms or willing to try, creating an addressable market of a whopping USD293b. Of

this, ~55% of the addressable market lies beyond Tier II cities, so e-Grocers will

increasingly move to smaller towns, a region that has low coverage so far. COVID-19

led lockdown has certainly helped e-Grocers, with CY20 monthly exit run-rate almost

2x that of Jan’20 GMV and largely sustaining the surge seen during the lockdown as

evident from our app visit analytics. Over this period, Big Basket/Grofers witnessed a

4x/3x surge in daily orders, with a steady rise in AOVs.

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Value v/s convenience buyer – a key driver of profitability

In India, a large (65%) quantum of the e-Grocery addressable households are price

sensitive (low gross margin) value first customers (average income of 0.3-0.6m p.a),

prioritizing discounts over limited variety, longer waiting time, or an inconvenient

experience. This is against the higher margin convenience first customers (average

income of 1.2-1.4m), who prioritize a shopping experience and prefer purchasing

from a wider product assortment/availability in one place and lesser crowds/waiting

time. Unit economics of value first customers appear promising with key

determinants of profitability like bulk purchases, higher private labels, low delivery

cost, and customer stickiness. e-Grocers increasingly target them to drive

profitability as in the case with modern retailers.

Logistic cost and inventory management remain a key hurdle; needs a

differentiated approach to tackle

The Grocery market has been historically dogged down by wafer thin (15-20%) gross

margins, higher (20-25%) logistics cost, and complex inventory management, making

it difficult to achieve sustainable profits and compete with the traditional

retail/distribution channel, which operates on 15% cumulative margin in the value

Research Analyst: Aliasgar Shakir

(Aliasgar.Shakir@motilaloswal.com)

Suhel Shaikh

(Suhel.Ahmad@MotilalOswal.com)

4 June 2021

1

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Retail

Expect share of Private labels to touch

45% for e-Grocery players in CY22E

Source: Online private label growth

paradigm CY20, MOFSL

Transportation cost could increase to 28%

of order value

chain. But the path to scale and profitability, with multiple levers and a stronger

balance sheet, is now becoming clearer for e-Grocers. These players have started

targeting bulk purchase to leverage cost, limit assortment (thus aiding inventory

control), pushing margin accretive private labels, saving acquisition cost due to

customer stickiness, and charging delivery cost below a threshold of AOV (average

order value), thus creating a favorable equation of higher gross margins and

reducing cost/order. Our channel checks suggest Big Basket and Grofers have taken

a more rational approach, pushing 30-40% private labels in the overall mix, higher

AOV, and limiting discounts, which has led to the recent improvement in

profitability. The one-year old JioMart has kept delivery free without any minimum

AOV threshold, while Flipkart/Amazon has targeted a wider network of cities to

push revenue growth. In terms of price competitiveness, JioMart is the lowest price

player, followed by DMart Ready. Our app visit analytics suggest that JioMart/Big

Basket/Grofers enjoys higher app visits, while Dunzo/JioMart enjoys the lowest

bounce rate, implying more page visits.

Multiple players with varied models taking a shot

Multiple platforms are disrupting the grocery space with innovative models. These

are: a) e-Grocery specialists, along with early morning meat and dairy specialists

that enjoy higher customer recall, b) market place players leveraging deep customer

analytics and offering quick deliveries to a wide network of locations, and c) offline

retailers who have started venturing into omnichannel offerings in select locations.

These retailers operate through differentiated models to achieve scale and

profitability: a) inventory model, which allows them to control the quality and price,

but has higher logistics cost, b) hyperlocal model, which is increasingly seeing higher

acceptance by many e-grocers, with back-end inventory control to address faster

turnaround and logistics cost, and c) hybrid model that leverages their own stores to

provide a smoother last-mile delivery. With increasing scale, we see a foolproof

integrated approach, which will enhance profitability.

Source: e-commerce retail

logistics – May’18, MOFSL

App traction of e-Grocery players

Countries

Online penetration

India

China

UK

US

0.3%

6%

4%

8%

Brick and mortar stores have a cost advantage, but consumer convenience

will soon compel them

The fear of online grocery retailers is turning real as a majority of e-Grocery growth

has predominantly come from regions, which is the key market of modern retailers.

Offline retailers presently hold an edge due to varied factors like DMart’s ownership

model and cost competency. Rent though 5-7% of sales, makes up nearly one-third

of gross margin. Despite the high capital intensive model, it creates a strong cost

competency, which drives productivity and scale. Similarly, Reliance Retail’s edge

lies in its deep store network, its evolving hyperlocal model, and backward

integrated B2B Grocery model, which, when combined, could certainly provide a

logistics edge. However, our case study explains on e-Grocers explains higher private

labels, lower customer acquisition, supply chain and marketing cost has enabled

them to turn profitable. As the customer is gradually being habituated to online

grocery shopping, it is imperative to build an omnichannel network to ensure

business continues to meet customer requirements.

Majority of Online sales are from the

metros (%)

Source: RedSeer and Big Basket

4 June 2021

2

Retail

e-Grocery addressable wallet by

category

Valuation and view

DMart

We expect DMart to deliver FY20-23E revenue/EBITDA CAGR of 23%/21%, factoring

in -5%/50% SSSG (two-year SSG over the low base of FY21) and 30/40 store

additions in FY22E/FY23E. Its continued cost/price competitiveness should hold the

company in good stead. However, a) growing scale of Online retailers, and b)

potential moderation in growth and return profile may restrict a re-rating. We value

DMart at a 20% discount to its three-year average EV/EBITDA multiple of 58x on a

FY23E basis, valuing it at INR2,850, implying a 8% downside. Retain Neutral.

Reliance Retail Ventures (RRVL)

RRVL has maintained its strong performance in the last five years. The recent fund

raise of INR377b would further strengthen its physical and online presence. We

expect 19% revenue/EBITDA CAGR each over FY20-23E to touch INR2.2t/INR166b by

Source: RedSeer report

FY23E. We value the company on a SoTP basis, valuing its core business at 31x FY23E

EV/EBITDA and connectivity business at 4x FY23E EV/EBITDA to arrive at our TP of

INR745, implying INR670 (for its 90% stake). Our premium valuation multiple

captures the opportunity for rapid expansion in its Retail business and the

aggressive rollout of the JioMart platform.

4 June 2021

3

Retail

Story in Charts

Exhibit 1:

Modern Retail/Online to contribute 7.3%/2.8% of total F&G market in

CY25E

Traditional retail

USD5b

Modern retail

0.3%

4.8%

Online

2.8%

3.4%

USD2b

USD24b

USD18b

USD50b

7.3%

USD295b

96.5%

USD577b

94.9%

USD722b

89.9%

2016

2019

2025E

Source: RedSeer report

Exhibit 2: Key formats in Organized Retail stores

Format

Average store size

Focus category mix

Hypermarkets





30,000-60,000 sq. ft.

F&G: 30-35%

Non-Food FMCG: 15-20%

General merchandise: 10-14%

Apparel: 20-25%

Furniture and Furnishing:

2-6%

Destination format for

planned visits

Emphasis on shopping

experience and a wide

variety of products

Hybrid supermarkets





10,000-25,000 sq. ft.

F&G: 45-50%

Non-Food FMCG: 20-25%

General merchandise:

10-15%

Others: 10-25%

Smaller than

hypermarkets in terms of

retail space and category

mix

Modern convenience stores





1,500-3,000 sq. ft.

F&G: 65-70%

Non-Food FMCG: 20-25%

General merchandise: 5-10%

Key

differentiating

factors











Key players



Big Bazaar, Spencer’s, etc.



DMart, Q Mart, Spencer’s,



Star, Reliance Fresh, Food

Bazaar, etc.

Similar to supermarkets, but the

focus is more on fast moving

products with

emphasis on neighborhood

requirements

Have low inventory levels as

compared to supermarkets

Easy Day, Heritage, Nilgiris, M.K.

Retail, Ratandeep and other regional

players

Source: MOFSL

Exhibit 3: e-Grocery household segment details

Particulars

Average annual

income (USD)

Key grocery purchase

priorities

Value first households

7,000

Lowest prices

Discounts

Cash backs/offers

Sale events

Good returns/exchange policy

Quality/hygiene

Purchase behavior

Buy groceries in bulk and at times

defer purchases to get best-priced

products

Convenience first households

16,000

Wide assortment/variety of options

Availability of desired products in one

place

Emergency/unplanned needs

Low waiting time

Quality/hygiene

Exotic options

Customer support service

Prefer to top up basket as per needs,

and purchase from places where

desired assortment is available

without any hassle

Source: RedSeer report

4 June 2021

4

Retail

Story in Charts

Exhibit 4: e-Grocery market trend in CY20

Source: RedSeer report

Exhibit 5: App traction of e-Grocery players

Company

Big Basket

Grofers

JioMart

Supr Daily

Licious

Dunzo

Nature’s Basket

Visits in Mar’21 (m) Average visit duration

7.15

1.85

7.8

0.1

0.89

0.3

0.25

3.22

4.22

2.09

4.01

2.52

4.01

2.35

Pages per visit

4.99

5.44

8.36

3.72

4.01

4.79

2.88

Bounce rate

64.2%

53.5%

42.1%

62.6%

54.8%

46.4%

59.5%

Source: Similarweb, MOFSL

Exhibit 6: Detailed working on logistic cost (assuming AOV OF INR1,300)

Opted

Opted for COD

Cost = INR195

(INR130+65)

Forward Logistic (FLC)

Cost = INR130

(10% of order value)

Cash on delivery (COD)

Cost = INR65

(50% of FWC)

Not opted for

COD

Cost = INR130

Return logistic

Cost = INR169

(~30% higher

than FWL)

Return logistic

Cost = INR169

(~30% higher than

FWL)

Cost = INR364

(INR130+65+169)

Not opted

Cost = INR195

Opted

Cost = INR299

(INR130+169)

Not opted

Cost = INR130

Source: e-commerce retail logistics – May’18, MOFSL

4 June 2021

5

Retail

Evolving models for Grocery retailing

Huge opportunity to scale up

e-commerce market to exceed USD18b in CY24E

The USD600b Indian Food and Grocery (F&G) retailing market has historically seen

limited (a mere 1%) penetration from e-commerce players in India. This is in line

with global markets like China/the UK/the US, which also have single-digit e-

commerce contribution (a mere 6%/8%/4%). The e-commerce market in most other

retail categories like Consumer Durables, Mobile Phones, and even Fashion and

Lifestyle has grown exponentially. In the last few years, given the scale of the

market opportunity and low base, Online Grocery players have adopted innovative

models to penetrate the F&G market. This has resulted in the Online F&G market

growing 30x in the last 7-8 years to ~USD3b in FY20. Seen differently, the combined

revenue of Online F&G players (viz. Big Basket, Grofers, JioMart, Amazon, and

Flipkart) has become the third largest Modern Retail player (~INR3b in FY20) after

DMart and RRVL. The same is expected to grow by 59% CAGR over CY19-24E to

USD18b.

Modern Retail v/s e-commerce scale

The first wave of disruption in the traditional Grocery space was led by Modern

Retail. But despite its evolution since the last two decades, it is merely 5% of total

Grocery spends in India. Contrary to this, the same in US/UK/China stands at

92%/94%/57% of the total F&G market. This is because Modern Retail has

predominantly grown in metro and Tier I cities because of multiple operational

challenges like higher operating cost, lower gross margin, lack of skilled manpower,

regional/local limitation, and the mighty scale of India’s Grocery Retail market.

Overall market size

The Indian F&G retailing market (estimated to be 60-65% of the total Retail market)

has seen strong interest from domestic and global players in recent times. Growing

at ~12% CAGR over the last 8-10 years, the market has been historically dominated

by the traditional retail channel, which constitutes 96% of the market. Organized

retail has grown at 31% CAGR to USD24b, with just 4% penetration, offering huge

scope to large Modern Retail and online players. Over the next 4-5 years,

Modern/Online Retail is expected to garner 16%/59% CAGR to USD50b/USD18b,

increasing its share to 8-9% of the total F&G market.

4 June 2021

6

Retail

Exhibit 7:

Modern Retail/Online to contribute 7.3%/2.8% of total F&G market in

CY25E

Traditional retail

USD5b

Modern retail

0.3%

4.8%

Online

2.8%

7.3%

3.4%

USD2b

USD24b

USD18b

USD50b

USD295b

96.5%

USD577b

94.9%

USD722b

89.9%

2016

2019

2025E

Source: RedSeer report

Exhibit 8: Key formats in Organized Retail stores

Format

Average store size

Focus category mix

Hypermarkets





30,000-60,000 sq. ft.

F&G: 30-35%

Non-Food FMCG: 15-20%

General merchandise: 10-14%

Apparel: 20-25%

Furniture and Furnishing:

2-6%

Destination format for

planned visits

Emphasis on shopping

experience and a wide

variety of products

Hybrid supermarkets





10,000-25,000 sq. ft.

F&G: 45-50%

Non-Food FMCG: 20-25%

General merchandise:

10-15%

Others: 10-25%

Smaller than

hypermarkets in terms of

retail space and category

mix

Modern convenience stores





1,500-3,000 sq. ft.

F&G: 65-70%

Non-Food FMCG: 20-25%

General merchandise: 5-10%

Key

differentiating

factors











Key players



Big Bazaar, Spencer’s, etc.



DMart, Q Mart, Spencer’s,



Star, Reliance Fresh, Food

Bazaar, etc.

Similar to supermarkets, but the

focus is more on fast moving

products with

emphasis on neighborhood

requirements

Have low inventory levels as

compared to supermarkets

Easy Day, Heritage, Nilgiris, M.K.

Retail, Ratandeep and other regional

players

Source: MOFSL

Exhibit 9:

Region-wise presence of RRVL’s stores

Geographic Region

North

South

West

East

Total

Grocery stores

108

337

261

91

797

Source: Company

Exhibit 10:

Scale of Modern Grocery retailers

Company

RRVL

DMart

FRL (acquired by RRVL)

Spencer’s Retail (including

Nature’s Basket)

Star Bazaar

Stores

797

234

1350

191

57

Presence in cities

Over 180

70

400

42

7

Source: Media articles, company

Exhibit 11: Scale of operations of e-Grocery players

Big Basket

Particulars

Revenue (INR m)

Number of cities

Average basket size (INR)

Daily orders (’000s)

App downloads (m)

FY19

23,810

FY21E

1,19,005

35

1,482

220

26

FY19

836

Grofers

FY21E

99,645

27

1,820

150

23

FY19

1,436

DMart Ready

FY20

3,540

FY21E

Five (220

delivery

points)

JioMart

FY21E

59,400

200

Amazon

Pantry

FY21E

300

550

400

150

Over five

Over 10

Source: Media articles, company, MOFSL

4 June 2021

7

Retail

Exhibit 12: Online penetration in the Grocery segment globally

Countries

India

China

UK

US

Online penetration

0.3%

6%

4%

8%

Source: RedSeer report

An opportunity of 130m households

Out of 670m internet users in India, 400m use the internet actively (social media

and search engines). About 75% of active internet users are estimated to have

transacted online for service/products that translates into 154m online transacting

households in India in CY20. This has a potential to reach 233m by CY25, led by

internet penetration and increase in online transactions. Of these 154m, 130m have

already used e-Grocery platforms, or were aware/willing to try e-Grocery platforms,

creating an addressable market of USD293b against the current Online market size

of a mere USD3b. At present, majority of the e-Grocery market is concentrated in

metro/Tier I cities. However, nearly 55% of the addressable market lies in over Tier II

cities, which could expand to 61% in CY25.

Value v/s convenience buyer

e-Grocery households can be categorized as: a) value first, or b) convenience first

customers. Value first customers are conscious about pricing, discounts, and

return/exchange policies, while convenience first customers seek a wider product

basket in one place, lesser crowds/waiting time, and product quality/assortment. In

India, a much larger (65%) quantum of the e-Grocery addressable households are

value first. These value first households have lower income and therefore cannot

prioritize wider/exotic assortment and faster access. Hence, they prioritize, best

priced products under discount, cash back offers, and sales, even if there is limited

variety, longer waiting time, or an inconvenient experience.

Value first retailers have favorable unit economics

The huge addressable market underscores the opportunity, but it is difficult to run a

profitable operation sustainably, given the lower margin and high fixed cost nature

of the business. Convenience first customers typically generate higher margin given

their tendency to shop for higher-priced products, but they increase the cost of

doing business due to their requirement of wider product SKUs/basket, limited

crowding/waiting time, and better product quality/assortment. Against this, most of

the determinants of profitability – bulk purchase, assortment, private labels,

delivery cost, and stickiness – are in favor of value first households when compared

with convenience first households. Hence, the unit economics of serving a value first

household are very promising. An e-Grocery platform serving the value first

household could lose out on gross margin, given their nature of spending on low

price products, but it could offset the impact by: a) increasing share of private

labels, b) significant savings owing to an efficient supply chain as they are mostly

reliant on scheduled deliveries, and c) leverage costs with higher AOVs. The value

first addressable market should grow faster than the convenience first market over

the next five years.

4 June 2021

8

Retail

Exhibit 13: Majority of Online sales are from the metros (%)

11%

1%

Metro

Tier 1

Tier 2

88%

Exhibit 14: About 61% of the addressable wallet are from

value first customers (total: USD293b)

113

Value first

Convenience first

180

Source: RedSeer and Big Basket

Source: RedSeer

Exhibit 15: e-Grocery household segment details

Particulars

Average annual

income (USD)

Key grocery purchase

priorities

Value first households

7,000

Lowest prices

Discounts

Cash backs/offers

Sale events

Good returns/exchange policy

Quality/hygiene

Purchase behavior

Buy groceries in bulk and at times

defer purchases to get best-priced

products

Convenience first households

16,000

Wide assortment/variety of options

Availability of desired products in one

place

Emergency/unplanned needs

Low waiting time

Quality/hygiene

Exotic options

Customer support service

Prefer to top up basket as per needs,

and purchase from places where

desired assortment is available

without any hassle

Source: RedSeer report

Exhibit 16: e-Grocery addressable wallet by city type

Metro/tier 1

Tier 2+

Exhibit 17: e-Grocery addressable wallet by basket type

Stock up

15%

Non-daily top up

Daily top up

16%

58%

49%

42%

57%

42%

51%

43%

27%

Convenience first

Source: RedSeer report

Value first

Convenience first

Source: RedSeer report

Value first

4 June 2021

9

Retail

Exhibit 18: e-Grocery addressable wallet by category

Fresh

2%

Staples

2%

7%

35%

Packaged foods

Beverages

3%

Home Care

5%

12%

32%

Personal Care

2%

1%

52%

47%

Value first

Convenience first

Source: RedSeer report

Exhibit 19: Profiles of value first customers

Particulars

Cohort (%)

Age group

Annual household

income

Household size

Living setup

Cooking ownership

Housewife-led family

50%

25-40

INR0.6-0.8m

Traditional budget

conscious family

35%

35-50

INR0.4-0.8m

Young bachelors

15%

21-30

INR0.3-0.6m

3-5

3-5

1-3 (bachelors)

Married couple with young Married couple with parents,

Alone/flatmates

kids, with or without parents with or without grown up kids

Self

Self

Maid

Source: RedSeer report

Exhibit 20: Profiles of convenience first customers

Particulars

Cohort (%)

Age group

Annual household

income

Household size

Living setup

Cooking ownership

Quality seekers

58%

30-40

INR1.2-1.4m

3-5

Married couple with young

kids, with or without parents

Maid + self

Affluent foodies

22%

Over 35

Over INR1.4m

Young busy

couples

20%

25-35

INR0.9-1.2m

4-6

2

Married couple with parents, Married couple

with or without grownup kids without kids

Maid + self

Maid

Source: RedSeer report

Exhibit 21: e-Grocery household: Attribute comparison and impact on profitability

Particulars

Demand for lower

price/high discounts

Bulk purchase behavior

Assortment need

Private label openness

Fast delivery demand

Value first

households

High

High

Limited

High

Low

Convenience first

households

Moderate

Moderate

Very wide

Moderate

High

Impact on profitability

Discounts reduce net income

Bulk purchase increase AOV, which

reduce fulfillment cost/order

Limited assortment offers a better

ability to negotiate margins with

brands

Private labels provide a high gross

margin

Low fulfillment cost in scheduled

delivery v/s on demand

High stickiness reduced marketing

spend

Source: RedSeer report

Stickiness to one platform Moderate - high Moderate - high

4 June 2021

10

Retail

Exhibit 22: Comparison of unit economics by household type and impact on profitability

Particulars

Commission/margins

Cashback

Value first

households

15%

(-) 2%

Convenience first

households

22%

(-) 2%

Impact on profitability

High margins obtained from private

labels are passed on to value first

households, which reduces margin

Both households are interested in

discounts rather than cashbacks

Supply chain cost is high in the case

of convenience first households due

to on demand delivery with low

AOVs

Varies by platform

Varies by platform

Source: RedSeer report

Supply chain cost

Payment gateway cost

Marketing expense

Contribution margins

(-) 10%

(-) 1.5%

(-) 4%

(-) 2.5%

(-) 20%

(-) 1.5%

(-) 4%

(-) 5.5%

COVID-19 boosted Online Grocery sales

The COVID-19 led nationwide lockdown provided a much needed boost to Online

Grocery sales. It did to e-grocers what demonetization did for online payment

platforms. During the peak of COVID-19 in 2QCY20, panic led stocking by first-time

shoppers drove AOVs. The market reached 1.6x of Jan’20 GMV in Jun’20 and exited

CY20 with almost 2x Jan’20 GMV, largely sustaining the surge seen during the

lockdown. During this time, Big Basket/Grofers witnessed 4x/3x daily orders of pre-

COVID times at 300k/190k. AOV saw a 15%/25% jump to INR1,500/INR1,820.

Players saw higher customer retention, which shifted the base upwards in average

daily orders for Big Basket/Grofers to 220k/150k. A number of new players entered

the e-Grocery space during the ensuing COVID-led lockdown in CY20. For instance,

Swiggy and Dunzo expanded into e-Grocery and JioMart launched its e-Grocery

business in May’20. Amazon Pantry expanded to over 300 cities in Jun’20. This has

widened the reach of e-Grocery players.

e-Grocery players registered enormous growth in comfort/health food and hygiene

products owing to the shift in consumer preference to a healthy lifestyle. The Snacks

and Branded Food segment registered 75% QoQ growth in 2QCY20 v/s 5% prior to

the COVID-19 outbreak. Within this, Biscuits and Cookies grew the highest. Similarly,

Beverages, mainly Tea and Fruit Juice, witnessed 50% growth in same period v/s 2%

prior to COVID-19 outbreak. Even Personal Care Products/Home Utilities grew

24%/11% v/s 5%/6% prior to COVID-19 outbreak.

Exhibit 23: Growth in e-Grocery segments prior to and during COVID-19

Snacks and branded food

Beverages

Personal care products

Home utilities

75%

50%

5%

2%

5%

6%

24%

Growth during COVID

Source: Media articles, MOFSL

11%

Growth during pre COVID

4 June 2021

11

Retail

Exhibit 24: Average daily orders (INR) on Big Basket/Grofers

Big Basket

Grofers

Exhibit 25: Daily order trend (k) on Big Basket/Grofers

Big Basket

Grofers

1,300

1,450

1,500

1,820

300

190

220

150

80

Pre COVID

During COVID

Source: Media articles, MOFSL

60

During COVID

Post COVID

Pre COVID

Source: Media articles, MOFSL

Exhibit 26: e-Grocery market trend in CY20

Source: RedSeer report

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Competitive landscape

In order to tap the huge potential in the market and attract customers, multiple new

players have ramped up their Online Grocery business. The competitive intensity

has increased rapidly in recent times. Players are competing on two counts – pricing

(discount on delivery charges) and convenience (flexible delivery time, wider

product assortment, and delivery locations).



Product pricing:

Our channel checks indicate that JioMart is the lowest price

player, followed by DMart Ready – JioMart/DMart price points are 9%/4% lower

than Big Basket. For Staples and Food products, price points are 11%/8% lower.

In the case of HPC products, prices are 6% lower for JioMart, while other players

are offering similar prices. JioMart typically maintains a 7% off on MRP. On the

other hand, Big Basket’s product offering is at the highest level, which is

understandable as it caters to high-end customers in metros/Tier 1 cities, with a

wider product assortment and new categories, some of which are scarcely

available on other player’s shelves.



Delivery charge/time:

Online Grocery players incurs higher logistic cost, which is

traditionally passed on to customers for AOVs below a certain threshold. To

accelerate growth, Big Basket has initiated free delivery above INR1,200 AOV,

while Grofers/Amazon has a minimum order requirement of INR500/INR799.

DMart offers pick up points – ‘DMart Ready stores’ – for free delivery, with a

minimum threshold of INR1,000, while it charges 3% of the order value, or INR49

(whichever is higher), for home delivery. JioMart has the most aggressive

promotion, offering free delivery without any minimum delivery requirement to

boost the number of orders. In addition to delivery charges, players are offering

flexibility in delivery timelines to customers to attract convenience conscious

customers (viz., standard delivery and delivery in 1-2 days) and charge a

premium accordingly to increase profits.



Product offerings:

Players are offering various product categories to cater to

various kind of customers. Value players keep smaller SKUs with lower margins.

On the other hand, convenience focused players keep wider SKUs that offers

higher margins. As per our analysis, Big Basket has the widest SKUs, followed by

Grofers and Amazon – Big Basket/Grofers offer the widest product categories

that include eggs, chicken and meat products, and pet care products. Players are

leveraging private labels to create unique products and to increase repeat

purchases. New players, catering to niche product markets, are emerging such as

Licious that offers only chicken, meat, and egg products, while Milkbasket and

Supr Daily offers fixed morning deliveries of only dairy and bakery products.



Delivery locations:

To increase the scale of operations, players are looking to

expand their serviceable areas to Tier II/III cities, which have limited penetration

in the e-Grocery market. Marketplace players like Amazon/Flipkart are enjoying a

competitive edge as they could leverage their e-commerce capabilities to service

more areas. Apart from these, JioMart could also leverage its higher physical

presence to significantly increase its serviceable areas. Big Basket/Grofers are

present in comparatively lower numbers in metro/Tier I cities, while DMart has

restricted its online presence to a few metro cities, with limited serviceable

areas.

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Exhibit 27: Product pricing of e-Grocery players (INR)

Food products

Ashirwad Atta

Fortune Sunflower Oil

Saffola Gold cooking oil

Dawaat Biryani Basmati

Devaaya rice

India Gate Classic basmati

Toor dal (private label)

Masoor dal (private label)

Amul Cow Ghee pouch

Amul Ghee pouch

Gowardhan ghee Jar

Branded Sugar

Amul Taaza tetra pack

Brooke Bond Red Label

Tropicana Orange Juice

Bournvita

Amul butter

Haldiram bhujia

Parle - G

Total

Surf Excel Easy Wash

Rin Detergent Powder

Arial Front Load

Vim Dishwash bar

Lux soap

Dove Soap

Pears Pure and Gentle soap

Clinic Plus Long and Health Shampoo

Head & Shoulder Cool Menthol shampoo

Parachute hair oil

Bajaj Almond drops hair oil

Harpic Plus toilet cleaner

Lizol Lavender floor cleaner

Colgate Dental Cream

Colgate Max Fresh

Total

Grand Total

Quantity

10kg

1ltr

1ltr

1kg

5kg

5kg

1kg

500gm

1ltr

1ltr

1ltr

1kg

1ltr

500gm

1ltr

750gm

500gm

1kg

800gm pack

4kg

7kg

4kg

200g

(Pack of three)

3*150g

3*100g

3*125

340ml

650ml

1ltr

500ml

1ltr

975ml

500g

300g

JioMart

369

799

151

165

399

859

114

47

450

434

495

47

61

244

73

255

225

168

59

5,414

355

480

825

39

89

115

103

179

389

360

243

148

165

177

109

3,776

9,190

DMart

Ready

369

825

145

165

375

942

114

48

465

450

495

47

61

244

79

265

225

170

62

5,546

399

455

1015

42

94

129

112

131

415

349

262

157

165

177

109

4,011

9,557

Big Basket

369

871

155

179

463

1,041

125

56

500

485

521

47

63

290

95

269

235

214

59

6,037

462

485

825

39

97

101

138

175

438

323

246

153

178

184

145

3,989

10,026

Grofers

369

821

139

165

399

899

125

56

482

462

531

47

64

270

110

287

230

170

69

5,695

366

434

900

39

Amazon

Pantry

394

819

122

170

386

875

118

55

500

450

537

52

64

265

120

286

225

215

59

5,712

390

454

1045

35

97

102

140

125

140

123

152

143

456

377

430

323

238

246

152

156

179

161

158

158

145

147

4,026

3,985

9,721

9,697

Source: Company, MOFSL

Exhibit 28: Delivery charge of e-Grocery players

Company

Big Basket

Grofers

DMart Ready

JioMart

Amazon

Pantry

Price range

Over 1,200

600-1199

Less than 600

Over 250

Less than 250

Delivery charges

0

30-35

50

0

49

Minimum order is INR1,000. Free at DMart Ready pick up

points. Home delivery is chargeable at INR49, or 3% of the

order value, whichever is higher

0

0

59

Source: Company, MOFSL

Over 799

Less than 799

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Exhibit 29: Product offerings of e-Grocery players

Fruits and Vegetables

Dairy and Bakery

Staples

Packaged Foods

Beverages

Personal Care

Home Care

Baby Care

Kitchen Ware

Eggs

Chicken, Meat, and Fish

Pet Care

Jio Mart

Y

Y

Y

Y

Y

Y

Y

Y

Y

N

N

N

DMart Ready

Y

Y

Y

Y

Y

Y

Y

Y

Y

N

N

N

Big Basket

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Grofers

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Amazon

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

N

Y

Source: Company, MOFSL

App visit analytics: JioMart garners better traction

To gauge customer adoption of e-Grocery apps, we mapped the traction of apps

from Similarweb. Monthly data from Jul’20 to Mar’21 shows that app visits have

been lower from Jul’20 as the economy opened up with the lifting of the nationwide

lockdown, but it still remains strong. JioMart/Big Basket/Grofers enjoy higher app

visits owing to their higher popularity and wider presence, while other apps

garnered lower visits due to lesser serviceable areas and niche product offerings.

Grofers/Dunzo garnered the highest average duration per visit; while Dunzo/JioMart

enjoyed the lowest bounce rate, implying longer stays or more page visits on the

app.

Exhibit 30: App visit trend on JioMart

JioMart (m)

Exhibit 31: App traction of e-Grocery players

Company

Big Basket

Grofers

Visits in

Mar’21 (m)

7.15

1.85

7.8

0.1

0.89

0.3

0.25

Average visit

duration

3.22

4.22

2.09

4.01

2.52

4.01

2.35

Pages

per visit

4.99

5.44

8.36

3.72

4.01

4.79

2.88

Bounce

rate

64.2%

53.5%

42.1%

62.6%

54.8%

46.4%

59.5%

11.3

12.3

9.45

10.4

9.75

9.5

8.2

7

7.8

JioMart

Supr Daily

Licious

Dunzo

Nature’s

Basket

Source: Similarweb, MOFSL

Source: Similarweb, MOFSL

Exhibit 32: Grofers’ app visit trend

Grofers (m)

Exhibit 33: Big Basket’s app visit trend (k)

Big Basket (m)

2.65

2.7

1.95

2.25

2.05

1.7

2.05

1.6

7.8

1.85

6.85

5.9

5.9

5.55

5.85

6.1

5.95

7.15

Source: Similarweb, MOFSL

Source: Similarweb, MOFSL

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Exhibit 34: App visit trend for Nature’s Basket

Naturesbasket

Exhibit 35: Dunzo’s app visit trend (k)

Dunzo (m)

0.4

0.33

0.27

0.26

0.21

0.23

0.25

0.21

0.25

0.29

0.28

0.29

0.24

0.27

0.3

0.25

0.24

0.3

Source: Similarweb, MOFSL

Source: Similarweb, MOFSL

Exhibit 36: Supr Daily’ app visit trend

Super Daily (m)

Exhibit 37: Licious’ app visit trend (k)

Licious (m)

0.1

0.075 0.07

0.045 0.04

0.04

0.075

0.11

0.1

0.89

0.72

0.62

0.6

0.56

0.57

0.66

0.71

0.67

Source: Similarweb, MOFSL

Source: Similarweb, MOFSL

Deep pocket players could change the industry standing

Despite its huge market potential, the e-Grocery space is getting crowded, as new

players with different operating models are entering this space. Currently, Big

Basket and Grofers are enjoying the highest market share. However, this could

change given the increased focus of e-commerce giants like Amazon/Flipkart in this

space and the recent entry of Indian Retail giant RRVL. Though

Amazon/Flipkart/RRVL are new to the e-Grocery business, they have already

ramped up significantly on the back of aggressive offerings, offline/online network,

and sufficient funds to bear losses in the near term.

RRVL, Amazon, Flipkart committed big money

RRVL has recently committed INR247b to acquire the retail assets of the Future

group, which would significantly enhance its Retail presence. This would increase its

Retail Grocery presence to 2,150 stores from 797 in FY20. Amazon, the US e-

commerce giant, had invested USD6.5b in the Indian e-commerce market and is

currently increasing its focus on e-Grocery space, given its huge potential and higher

customer stickiness. Another US retail giant Walmart acquired 77% stake in Flipkart,

an Indian e-commerce player, for USD16b, and announced an investment of USD2b

in the Indian e-commerce market. Apart from these investments, these players have

enough funds to infuse additional capital in the Indian market. RRVL has recently

sold 10% stake for ~INR470b and could raise further capital by selling additional

stakes. Amazon India’s US parent can infuse additional capital required to gain

share, while Flipkart’s parent Walmart could infuse internal capital or could

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potentially look to list the company to garner additional funds. Given the huge

growth potential in the Grocery space and increasing interest of foreign players in

the Indian Grocery market, there is a place for different players with innovative

models and consolidation is still far away.

Challenges in Online Grocery retailing

The e-Grocery Retail business faces three key challenges: a) low margin, b) higher

logistics cost, and c) complex inventory and supply chain management at both the

buyer and seller end. The wafer-thin margin of the business, along with a vast

number of SKUs and perishable nature of the inventory, makes it difficult to manage

operations. This is further aggravated due to the need to fulfill the quick delivery

requirement of customers, while bearing the higher logistics cost of the business.

Diverse eating habits and preferences across different regions/states in India,

increases inventory and supply chain woes.

Food Delivery v/s e-Grocery delivery

In comparison to the food delivery business, where margins/AOV are high and the

product size is compact, which ensures lower logistics costs, Online grocery players

are burdened with lower margins and higher logistics costs owing to lower AOV and

bulky order quantity (for the same price as in food delivery). Further, food delivery

does not offer a return option, thus saving on reverse pick up cost, which is ~10% of

the order value. The target consumer availing Food Delivery is from a relatively

higher income bracket and is willing to pay for delivery, whereas the value first e-

Grocery shopper would prefer online v/s offline Grocery, largely due to pricing

instead of convenience.

Traditional FMCG v/s e-Grocery logistic cost

To understand the difference between distribution cost in the traditional FMCG

business and e-commerce logistic costs, we have compared the distribution margin

of large FMCG players with the logistics cost of online grocery players. Our workings

indicate that distribution/retailing margin in the traditional FMCG business is ~15%

and it could be higher for some smaller and premium products. Discounts and

promotional offers provided by companies to distributors/wholesalers is ~5%. So,

the overall margin, after the company’s cost of product development, is largely

~20%. Against this, the logistic costs borne by e-Grocery players is 20-28% of the

order value, which leaves limited room for profitability.

Exhibit 38: Hindustan Unilever’s margin distribution

HUVR (Jun'20)

Largest selling SKU

MRP

Cost to retailer

Promotions and schemes (%)

Cost to distributors

Promotions and schemes (%)

Cost to company post GST

GST (%)

Cost to company pre-GST

Soap

%

8

3% on an

average

5

Changes

18

Lux soap

INR10 SKU

10.00

9.25

N.A.

8.77

0.00

8.77

1.34

7.43

Detergent

%

8

3% on an

average

5

Changes

18

Surf Excel

INR10 SKU

10.00

9.25

N.A.

8.77

0.00

8.77

1.34

7.43

Skin Care

%

8

5% on an

average

7

Changes

18

Fair & Lovely

INR54 SKU

54.00

49.90

N.A.

46.53

0.00

46.53

7.10

39.43

Source: MOFSL, Company

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Exhibit 33: Margin distribution for Colgate-Palmolive India

CLGT (Jun'20)

Largest selling SKU

MRP

Cost to retailer

Promotions and schemes (%)

Cost to distributors

Promotions and schemes (%)

Cost to company post GST

GST (%)

Cost to company pre GST

Toothpaste

%

10

10%

5

Changes

18

CDC

100gm

52.00

47.27

N.A.

44.90

0.00

44.90

6.85

38.05

Toothbrush

%

35

10%

6

Changes

18

Brush Super Flexi

INR20 SKU

20.00

14.81

N.A.

14.00

0.00

14.00

2.14

11.86

Source: MOFSL, Company

Exhibit 39: Margin distribution for Britannia Industries

BRIT (Jun'20)

Largest selling SKU

MRP

Cost to retailer

Promotions and schemes (%)

Cost to distributors

Promotions and schemes (%)

Cost to company post GST

GST (%)

Cost to company pre GST

Biscuits

%

10

1-2%

5

None

18

Good Day

58gm

10.00

9.09

0.15

8.65

0.00

8.50

1.30

7.20

Source: MOFSL, Company

Exhibit 40: Grocery supply chain – 12-15% margin leakage at local Kirana shops

Source: MOFSL, Company

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Logistic cost – a major burden for e-grocers

Delivery failure, returns, and cash on deliver increases the cost burden:

Our

workings indicate that transportation logistic cost could be ~28% of the total

order value, including the cost of reverse pickup (R) and cash on delivery (COD),

which together constitute over 15% of AOV. Total logistic cost could touch up to

40% of total order value, including other components such as warehousing,

freight forwarding, and other value-added logistics. This makes the operating

model unviable for the e-grocers as the industry offers wafer-thin margins. Of

total online orders, ~20% are returned and 50-55% of orders are COD. This

increases the settlement period, lengthens the cash conversion process, and

increases the risk of rejections.



Last mile a key pain point:

The e-commerce segment incurred logistic cost

towards four major segments: transportation, warehousing, freight forwarding,

and value-added logistics. Transportation constitutes the lion’s share of total cost

and ~60% of total logistic cost for online players, while the rest is contributed by

other segments. Within transportation, these two processes contribute majority

of the cost (~90%).





Line haul constitutes 40-45% of total transportation cost. Delivery through

surface or air is dependent on delivery timelines – airline is 3-4x costlier

than surface, but delivery timelines are lower. As per a KPMG report, 21% of

line haul were through air in CY18. This is poised to decrease in the long run

as players are looking to turn profitable and reduce their logistics costs.



Another major component of transportation cost is last-mile delivery, which

forms 45-50% of total cost. In developed countries, this stands at 25-30%. In

the longer term, this should reduce.



Lastly, processing and first mile is ~10% of total transportation costs.



Focus on cost cutting:

Players are increasingly focused on reducing their logistic

cost. They have started shifting line haul to rail and road from air. This would

significantly reduce line haul costs. However, in e-Grocery, where inventory is

perishable and requires quick delivery, it would be difficult for players to shift the

entire line haul to surface. Retailers are increasing their footprint through

fulfillment centers/dark stores to store inventory locally. This should increase the

turnaround time and reduce last-mile delivery costs. With the reduction of these

two major components, transportation cost could fall significantly.

Exhibit 41: Split in e-commerce transportation cost (%)

2% 8%

21%

Processing

45-50%

40-45%

First mile

Line Haul

Last Mile

79%

Air

Surface

Exhibit 42: Line haul split (%)

Source: e-commerce retail logistics – May’18, MOFSL

Source: e-commerce retail logistics – May’18, MOFSL

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Exhibit 43: Transportation cost could increase to 28% of order value

% of Order Value

28%

23%

15%

10%

Neither COD nor R

COD but no R

No COD but R

COD and R

Source: e-commerce retail logistics – May’18, MOFSL

Exhibit 44: Detailed working on logistic cost (assuming AOV OF INR1,300)

Opted

Opted for COD

Cost = INR195

(INR130+65)

Forward Logistic (FLC)

Cost = INR130

(10% of order value)

Cash on delivery (COD)

Cost = INR65

(50% of FWC)

Not opted for

COD

Cost = INR130

Return logistic

Cost = INR169

(~30% higher

than FWL)

Return logistic

Cost = INR169

(~30% higher than

FWL)

Cost = INR364

(INR130+65+169)

Not opted

Cost = INR195

Opted

Cost = INR299

(INR130+169)

Not opted

Cost = INR130

Source: e-commerce retail logistics – May’18, MOFSL

Private labels – the next focus area of online players

Move to own the value chain

In line with the strategy followed by offline retailers, online grocery players are

foraying into the private labels, which should act as the next big growth driver. As

per industry reports, 50% of repeat purchases on e-Grocery platforms could be

attributed to private label sales. Revenue share of private labels for e-Grocery

platforms have increased to 40% in CY19 v/s 32% in CY16 and are expected to reach

45% in CY22E. Private label helps e-Grocery players through multiple ways.



Owning the supply chain:

It allows them to own the entire value chain from

sourcing, manufacturing, and distribution of final products to customers, thus

improving inventory/supply chain management.



Targeting the untapped market:

By leveraging insights from data gathered on

their online platform, these players develop products with high demand for the

untapped market segment. Despite competing with the established brands, e-

Grocery players gain market share by developing unique products based on

price, nutritional value, taste, etc., while ensuring product quality. In a diverse

market like India, players develop private label products based on regional

preference, which are often overlooked by national brands given its limited

market size.

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Improve customer stickiness:

The unique brand positioning helps improve

customer stickiness. This, along with better customer service, leads to repeat

purchases on the platform and ensures sustainable growth.



Better margin:

This enables e-grocers to generate better margin as it removes

intermediary margins and leakages in the value chain. Private labels offer 1.5-2x

margin over branded products. In grocery retailing, the margin on in-house

products lies in the 10-14% range v/s 7-10% on branded products.



Exhibit 45: Expect share of Private labels to touch 45% for e-Grocery players in CY22E

Share of private labels (%)

32%

40%

45%

CY16

CY19

CY22E

Source: Online private label growth paradigm CY20, MOFSL

Specialist players have a higher share of in-house brands

E-Grocery specialists like Big Basket and Grofers were earlier movers into private

labels and are enjoying a higher share than their marketplace counterparts like

Amazon and Flipkart. Specialists are garnering 25-40% of their revenue share from

in-house brands v/s 5-10% for marketplace players. This is further substantiated by

the fact that Big Basket and Grofers offer private label products across all grocery

segments, whereas offerings are restricted to 3-4 segments in the case of

marketplace players.

Grofers has a total of eight in-house brands, which constitute 40% of its revenue.

The company is looking to increase its share to 60% in the near future. It is looking

to invest USD15m in its own brands in CY21 as it plans to ramp up its private label

offerings in baking essentials, immunity products, and ready-to-eat category. It is

looking to launch newer product categories such as health supplements, general

merchandise, and fashion.

Big Basket currently garners one-third of its sales from private labels. It is integrating

backward into the supply chain by partnering with farmers to expand in-house

brands – BB and Fresho portfolio – to its staples, fruits, and vegetables category. To

serve premium health conscious customers, it has an in-house brand, GoodDiet,

which generate higher margins. Flipkart has also made an investment into Ninjacart,

a Fruit and Vegetable supply chain Agri startup.

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Exhibit 46: e-Grocery players’ product portfolio of private labels

Categories

Fruits and Vegetables

Foodgrains, Oil, and

Masala

Bakery and Dairy

Beverages

Snacks and Branded

Foods

Cleaning and

Household

Eggs, Meat, and Fish

Healthy Food

Big Basket

Fresho

BB Popular, BB Royal, Fresho, Fresho

Organic, Fresho Signature, and

GoodDiet

Fresho, Fresho Organic, and Fresho

Signature

BB Royal

BB Royal, Fresho Signature, and

GoodDiet

BB Home

Fresho and Fresho Signature

BB Royal Organic, and GoodDiet

Grofers

G Fresh

Grofers Mother's Choice,

and Grofers Happy Day

Grofers Happy Day

Grofers Happy Day

Havemore, and Grofers

Happy Day

Grofers Happy Home, and

Savemore

NA

Grofers Mother's Choice,

and Grofers Happy Day

Amazon

NA

Vedaka

NA

NA

Solimo

Presto

NA

Flipkart

NA

FlipKart

Supermart

NA

FlipKart

Supermart

NA

NA

NA

FlipKart

Solimo, Vedaka

Supermart

Source: Company, MOFSL

Different kinds of players operating in the Online Grocery space

Multiple platforms are disrupting this emerging space with innovative models. There

are e-Grocery Specialists that have created solid service standards by specializing in

early morning deliveries or specific product categories like meat or hyperlocal

(connecting consumers to local Grocery stores) delivery, and market place players

who have launched grocery as an additional category on their e-commerce

platforms. There are three kinds of players operating in the e-Grocery space: a)

market place, b) specialist, and c) offline players moving to omnichannel.



Market Place:

To tap the humungous opportunity in the e-Grocery space,

general e-commerce Market Place players like Amazon and Flipkart are entering

into Online Grocery. Amazon is leveraging both inventory-led and the hyperlocal

model to serve this category via three channels: a) Amazon Pantry, b) Amazon

Fresh, and c) Amazon Now. Flipkart caters through two channels: a) Flipkart

Supermart and b) Flipkart Quick. It uses the inventory model for the Supermart

platform and hyperlocal model for Quick.



Specialists

(Verticals, Micro Delivery verticals, Super Verticals, and Hyperlocals):

These players operate only in the e-Grocery segment and enjoy strong customer

recall.



Verticals:

Legacy players like Big Basket and Grofers are focusing on an

inventory-led model.



Hyperlocals:

New entrants like Dunzo and Swiggy are leveraging the

hyperlocal model given its lower capex requirement.



Micro Verticals:

Niche players operate in this space and serve some product

categories. For instance, Milkbasket and Supr Daily cater to dairy and select

products in limited regions, and Licious in meat products.



Offline players move to omnichannel:

Currently, offline players like RRVL,

DMart, Spencer’s Retail, and Star Bazaar are entering this growing space. To

cater to this segment, RRVL launched its online platform JioMart and DMart

rolled out DMart Ready stores in selected cities. Among brick and mortar players,

JioMart have been the most agile and aggressive to tap this huge growth

opportunity. It can leverage its strong offline presence to act as a distribution

center. DMart Ready has an online presence in select cities and is still miniscule

in term of overall business.

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In the last three years, each business model has played a key role in addressing

specific needs. For example, specialist have expanded to 25-30 cities, market places

ramped up their grocery product basket as they already have a wide reach, and

micro delivery players too addressed a key market requirement of dailies.

Online players have grown significantly over FY16-19 and have now emerged a

major force in the organized F&G retailing industry. Big Basket clocked 65% revenue

CAGR over FY16-19, while Grofers’ net sale has grown by 107%. With this enormous

growth, the online market (including Big Basket, Grofers, Amazon, Flipkart, and

JioMart) has turned to be the third largest player in Organized Retail after DMart

and RRVL.

Exhibit 47: Cumulative Online Grocery Retail is the third largest Modern Retail channel and the largest by revenue (INR m)

Company

DMart

Reliance Grocery (est. excluding wholesale)

Future Retail (F&G)

Revenue of the third largest Online Grocery retailer

FY19

199,163

~140-150k

67,216

48,810

FY20

246,750

~200k-210k

67,061

NG

FY21

237,872

~200k-210k

NG

218,650

Source: Company, MOFSL

e-Grocery operating models

Inventory-led model:

Since the inventory is sourced, procured, and stored by the

player, this model requires a higher initial investment. However, it offers a better

margin potential as players are buying inventory themselves. Players can offer a

wider product range, with stringent quality checks, to attract customers and

reduce delivery timelines. However, the perishable nature of products and higher

SKUs limit viability of this model. Currently, most players like Big Basket, Grofers,

DMart Ready, and JioMart utilize this model.



Hyperlocal model

is being utilized by new entrants such as Dunzo and Swiggy.

JioMart is planning to utilize this model to increase its reach in smaller towns.

The player partners with local stores to offer last-mile delivery from these stores

and outlets. This allows it to maintain a capex light model as players are not

required to purchase inventory. The model enjoys higher customer confidence as

they know from where the products are being sourced. However, it offers lower

margin and quality checks, with product offerings limited by local availability.



Hybrid model

offers features of both inventory and a hyperlocal model as

players purchase inventory and store it locally in dark stores, and provide last-

mile delivery. This offers better inventory control, higher margin, stringent

quality checks, and reduced delivery timelines. This allows e-grocer’s to stock

products as per local taste and provides a trust factor for customers. e-Grocery

players like Flipkart and Big Basket are opening dark stores to leverage this

model. Many offline players are also linking their brick and mortar stores with

inventory online, which could offer a huge growth potential via this omnichannel.



4 June 2021

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Retail

Exhibit 48: Comparison of business models of F&G Online players

Particulars

Inventory storage

Capital requirement

SKUs

Lead time

Margin potential

Quality checks

Inventory-led

Inventory heavy model involves

outright purchase of inventory

Capital intensive

High

High

High

High

Hyperlocal

Inventory light model as it provides

only infrastructure and logistic

support

Capital light

Low

Low

Low

Low

Multi-channel

The hybrid model combines

features of inventory and

hyperlocal model

Moderate capital

Moderate

Moderate

Moderate

Moderate

Source: Media articles, MOFSL

Exhibit 49: Operating models of e-Grocery players

Source: RedSeer and Big Basket

Hyperlocal model gaining traction

Benefits and challenges

Globally, e-commerce players have seen limited success in ramping up scale and

profitability in the Grocery space due to: a) difficulty in managing quality and scale

of inventory, b) heterogeneous nature of the product, and c) lower margin and

higher logistics cost. The conventional market place or inventory model addresses

only part of the problem, and therefore has found it difficult to achieve scale and

profitability.

The hyperlocal model has evolved, where online players partner with local Kiranas

to offer last-mile delivery service from the latter’s stores. So, players can use their

platform to accept customer’s orders and fulfill it through local stores. In this way,

they own the customer, while providing the trust factor of a local store. The

advantages of this model are: a) utilizes inventory of local Kirana stores. As it does

not require e-grocers to invest in inventory, it is capex light and increases flexibility

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Retail

of the e-commerce platform. So, players can expand without incurring significant

capex. b) It addresses the issue of logistic cost and significantly reduces delivery

time – a key problem in the case of the inventory model, owing to the perishable

nature of the inventory. c) Given the different tastes and preference in India, this

model allows e-grocers to serve a heterogeneous market as local stores would stock

inventory as per regional taste. Retailers like JioMart operate the B2B model,

supporting inventory sourcing for Kiranas, thus owning the entire value chain,

ensuring inventory quality, as well as retaining margins.

But there are a few challenges associated with a hyperlocal model. a) The major

drawback of this model is that it restricts inventory check as it is delivered from

Kirana store to customer location. b) It also offers lower margin due to the Kirana’s

margin. c) Online players could face resistance from local stores due to lack of trust.

d) Kirana stores also provide delivery through their own personnel in smaller cities,

leaving limited benefits of partnering with e-Tailers. But these issues can be resolved

by adopting a hybrid model, wherein e-grocers would provide local delivery, but

from their own dark stores/fulfillment centers, to ensure quality and better margin.

Exhibit 50: Hyperlocal model

Source: Technopak Report CY17, MOFSL

Exhibit 51: Hybrid model

Source: Technopak Report CY17, MOFSL

4 June 2021

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Retail

Gaining prominence

Online players:

Owing to the inherent benefits of the hyperlocal model, e-

grocers are making adjustments to their operating model. As per media articles,

Flipkart is opening various F&G specific dark stores (spread over 3,000-4,000 sq

ft) in metros to deliver locally. It launched Flipkart Quick, its hyperlocal service, in

Jul’20 in Bengaluru to deliver products within two hours. Another e-Grocery

major, Big Basket is also looking to open smaller warehouses in major cities it has

a presence in. It is planning to open one dark store in 50 smaller cities, which

would enable it to deliver hyper locally and serve neighboring cities.



Offline players:

JioMart is best placed to enter into e-commerce via this model. It

can utilize the hyperlocal model, given its huge physical presence (over 12k

stores and ~800 Grocery stores as on Mar’20). It can leverage its own stores as

fulfillment centers to deliver products locally. DMart, on the other hand, has a

limited geographic presence, with the highest concentration in Maharashtra and

Gujarat. It could utilize its physical presence to implement the hyperlocal model

in those areas.



Digital apps are foraying into this space:

Apart from e-commerce and retail

players, digital apps are also adopting hyperlocal models, given its huge market

potential and lower capex requirement. In Mar’19, food delivery player Swiggy

entered into this space and commenced operations from Gurugram by

partnering with 3,500 stores. Dunzo, backed by Google, is another player

operating via the hyperlocal model in the e-Grocery space. It had raised

~USD70m in two rounds. This space is attracting foreign investors, and new

players with a hyperlocal model could enter in the near to medium term.



4 June 2021

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Retail

Strategy deployed by each player

DMart’s ownership model allows it a competitive edge at the

store level

With e-Grocery gaining strong traction, DMart’s focus remains on physical stores. Its

ownership model against the general practice of leasing stores may hamper the

pace of store addition. Grocery is a low margin business, with almost 5-7% rental

cost, i.e. 30-50% of the gross margin. The rental cost saving significantly increases

the ability to drive cost advantage, which can be passed on to the customer and

build cost competitiveness in the market. In a value-centric market, this helps drive

scale and productivity. Our workings of a typical store’s business economics over a

10-year cycle underscores that it take 4-5 years to drive scale benefits and RoCE. But

over a 10-year period, it drives a huge value proposition. DMart generates 40%/68%

RoCE from Tier I/II stores over 10 years of operations. The management is looking to

open larger stores in smaller towns. We view this as a justifiable approach given the

higher RoCE of these stores.

Exhibit 52: DMart’s RoCE generation over a store lifecycle

Year of operation

Sales capacity

(new store trajectory)

Sales

Gross margin (%)

Gross margin

Operating cost

Growth in operating expenses

EBITDA

(excluding rent)

Margin

Pre-tax cash RoCE –

Tier I

Pre-Tax cash RoCE –

Tier II

1

40%

388

14%

53

54

(1)

0%

0%

-1%

2

60%

582

14%

81

56

4%

25

4%

7%

12%

3

80%

776

14%

111

58

4%

53

7%

15%

25%

4

100%

970

15%

147

61

4%

86

9%

24%

41%

5

110%

1,067

16%

170

63

4%

107

10%

30%

51%

6

113%

1,096

16%

177

66

4%

111

10%

31%

53%

7

118%

1,144

16%

185

68

4%

117

10%

33%

56%

8

124%

9

131%

10

138%

1,203

1,271

1,338

16%

16%

16%

196

208

220

71

74

77

4%

4%

4%

125

134

144

10%

11%

11%

35%

37%

40%

59%

64%

68%

Source: Company, MOFSL

Treading cautiously online through DMart ready stores

While other players are aggressively moving into the e-Grocery space, DMart is

treading cautiously online through its DMart ready stores. Online players are largely

present in metro/Tier I cities, where DMart already has physical stores. It is

leveraging this presence with delivery/pick up options at an attractive pricing (refer

Exhibit 5) through DMart ready. The management is confident that it can compete

with bigger players on pricing through operational efficiencies.

DMart ready: Store economics

We calculated the store economics of DMart ready stores based on inputs from our

channel checks. Our workings indicate that a typical store generates an annual

revenue of INR9m at 17 daily orders worth INR1,500. At 13% gross margin, this

should deliver a gross profit of INR1.2m. Apart from that, a store has an operational

expense of INR1.4m, assuming three employees/store at a monthly charge of

INR23k, monthly rent of INR150/sq ft for a 250sq ft area store, and

utilities/marketing expense of INR4k/INR5k per month. The company posts an

operational loss of INR0.2m at the store level, i.e. -2% margin. To be profitable, a

store needs to service about 20 daily orders worth INR1,500, or its average order

4 June 2021

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value should increase to INR1,750 at the current level of 17 daily orders to achieve a

revenue of ~INR11m.

Delivery cost a bone of contention

The company delivers orders in two ways: a) pick-up points, and b) home delivery. It

utilizes DMart ready stores as pick-up points, wherein customers can place an order

and receive it at a scheduled time. The company doesn’t charge for the pick-up

service. However, it has a minimum order prerequisite of INR1,000. For home

delivery, the company charges INR49, or 3% of the order value, whichever is higher.

Currently, it has over 220 DMart ready stores in Mumbai and has expanded in Pune,

Bengaluru, and Ahmedabad. It is utilizing fulfillment centers to service its online

orders – orders are shipped directly from fulfillment centers to DMart Ready stores

or the delivery location (DMart Ready stores are not utilized for home delivery). This

helps in saving overheads and logistic costs by utilizing these stores. As a result, its

e-commerce operations enjoy superior supply chain efficiencies.

Exhibit 53: DMart Ready store economics

Particulars

Daily order (no.)

Order size

Annual revenue

COGS

Gross margin

Gross profit

Employee cost

Rent

Others

Operational expense

EBITDA

Margin (%)

Annual amount (INR)

17

1,500

91,80,000

79,86,600

13%

11,93,400

8,28,000

4,50,000

1,08,000

13,86,000

(1,92,600)

-2.1%

Source: Company, MOFSL

RRVL is leveraging JioMart for its online foray

Strongest offline player – deepest connectivity

RRVL is the strongest offline player with the deepest physical penetration. It has

over 12k stores, with a presence in over 6,600 towns, of which more than two-thirds

are in Tier II/III/IV cities. As on Mar’20, it has 3,684 stores, excluding Jio points, and

797 grocery stores, with a presence in all geographic regions (higher in south and

west India). With the completion of the Future group acquisition, it would add 1,350

stores to its network, with a presence in 400 cities. It has a strong private label

portfolio in the grocery, apparel, and consumer electronics among other categories,

which allows it to provide exclusive products, leverage its supply chain, and garner a

better margin profile.

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Exhibit 54: RRVL’s store network as on Mar’20

Geographic region

North

South

West

East

Total

Fashion and Lifestyle

566

932

538

350

2386

Grocery stores

108

337

261

91

797

Consumer Electronics

2022

2094

2343

2142

8601

Source: Company, MOFSL

RRVL operates via multiple models

RRVL operates through three models: a) offline B2C, b) B2B through Reliance

Market, and c) online through JioMart.

B2C:

RRVL has the deepest footprint in grocery retail, with 797 stores in over 180

cities. It serves customers through three store formats: a) Reliance Fresh, which

is a neighborhood store and offers daily needs and essential items across fresh

food, staples, FMCG, home, and personal care. b) Reliance SMART, which is a

destination store and offers a variety of products across fresh food, staples,

FMCG, home and personal care, beauty and cosmetics, value apparel, and

footwear and general merchandise. c) Reliance SMART Point which is a smaller

version of SMART stores and situated in residential neighborhoods to offer

grocery, pharmacy, and digital assistance. Its business scale has continuously

improved over the last five years.



B2B:

Reliance Market is RRVL’s wholesale cash and carry store that caters to

kirana stores, hotels, restaurants, catering businesses and B2B member partners.

As on Mar’20, it has 52 stores across 46 cities.



JioMart:

RRVL launched the beta version of its e-commerce website in May’20,

followed by the launch of its app in Jul’20. Since the launch of its beta version,

the company has accelerated operations aggressively and currently receives the

highest daily orders (500k daily orders). JioMart’s policy of 5% minimum discount

on MRP and no minimum order requirement, along with free delivery, led to

significant growth. Its app downloads crossed over 10m on Google Play Store and

it is witnessing 0.7-0.8m weekly app downloads as per media sources. It was in

the top three downloaded e-commerce apps in Aug’20, just behind Amazon and

Flipkart. In terms of geographic reach, it is second to only Amazon, which has a

presence in 300 cities as against JioMart’s presence in 200 cities. JioMart’s

customer reviews has improved in terms of product quality. However, other

issues relating to delivery timelines, refund, and customer support still persists.

Though improving product quality is a good step, RRVL needs to resolve other

delivery issues. As per mouthshut.com, Amazon leads in customer service

reviews, followed by Big Basket, Grofers, and JioMart.



4 June 2021

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Retail

Exhibit 55: RRVL clocked 26% revenue CAGR in the Grocery business over FY15-20

Grocery revenue (INR b)

YoY growth (%)

69%

48%

19%

-9%

95

FY15

86

FY16

108

FY17

139

FY18

234

FY19

346

FY20

377

FY21

25%

28%

9%

Source: Company, MOFSL

Exhibit 56: JioMart’s daily orders touched 500k

Daily Order (000s)

Exhibit 57: JioMart’s App downloads crossed 10m

App downloads (m)

Launch

of the

beta

End May

500

400

250

Launch

of the

app

Mid July

10+

7

5

1.5

End July

End Aug

Mid Sep

Current

Mid July

End July

Mid Dec

Source: Media articles

Source: Media articles

Exhibit 58: JioMart was the third highest downloaded e-

commerce app in Aug’20

Download in Aug'20 (m)

Exhibit 59: JioMart’s association with Kirana stores

Association with Kirana stores

8.7

8.3

4

13,500

End July

30,000

Flipkart

Amazon

JioMart

Source: Media articles

End Oct E

Source: Media articles

4 June 2021

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Retail

Exhibit 60: JioMart’s rating on Google Play store at par with

peers

Rating on Playstore

Rating on Apple

Exhibit 61: JioMart’s customer experience is lagging

Customer complaints

Product deliveries getting delayed

Cancelled deliveries

Missing products

No refund or delayed refund

Poor customer care and support team

Source: Media articles

4.3 4.4

3.6

2.5

4.4 4.4

4.3 4.4

JioMart

DMart Ready

Big Basket

Grofers

Source: Play store

Exhibit 62: JioMart garners the lowest rating on Mouthshut.com

Company

JioMart

Big Basket

Grofers

Amazon

Recommendation

12%

35%

27%

76%

Stars

1.31

2.15

1.92

3.57

Customer

Delivery timeliness

service

1

1

2

3

2

2

4

4

Reliability

1

2

2

4

Product

Apps and

quality

websites

2

2

2

3

2

2

4

4

Source: Mouthshut.com

Best placed to leverage the hyperlocal model

With the deepest physical footprint, RRVL is best placed to leverage the hyperlocal

delivery model. It can utilize its vast physical store network to fulfill online orders. Its

store network could increase significantly with the completion of the Future group

acquisition. Apart from using its own stores, RRVL is partnering with local Kirana

stores to increase its reach. It has partnered with Kirana stores in 23 cities as on

Dec’20. JioMart is also converting its B2B stores to fulfillment centers to service its

online orders. It is using Reliance Market stores to sell products to local kirana stores

and leverage these stores for home delivery (utilizing a hyperlocal model) by

accepting orders on its online platform: JioMart. In this way, it would own the entire

supply chain, while keeping customers’ trust intact as they are buying products from

their local stores.

Challenges in scaling up

The Indian F&G Retail market is dominated by mom-and-pop stores. To gain

significant scale in the F&G Online market, RRVL needs to partner with kirana stores.

This could be difficult as it could face resistance from these stores, given the lack of

trust and a system of home delivery already in place through their own delivery

personnel. These shops offer credit options to customers, which could be difficult to

replicate for organized players. The online market is getting crowded with the entry

of new players, with different operating models. Recently, Swiggy entered into the

hyperlocal e-Grocery space in Gurugram and Bengaluru. RIL would not be able to

overwhelm competition in the e-Grocery space by just offering steep discounts, as it

did in the telecom market, due to the strong financial muscle of competitors. Players

like Flipkart, Dunzo, and Amazon have a strong parental backing.

4 June 2021

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Exhibit 63: Profile of JioMart

Founded

Founders

Headquarters

Total funding

Major investors

Apr'20

Mr. Mukesh Ambani

Mumbai, India

USD20b (Jio Platforms)

Facebook, Google, Silver Lake, Mubadala,

Vista, TPG, General Atlantic, and ADIA

Source: RedSeer report

Exhibit 64: Strategic choices of JioMart

Particulars

Target HH

Advertisement

Delivery model

Strategic choices

Convenience first

Value first

Over 280 brands

Over 2,000 SKUs

Scheduled

Express

Micro

Source: RedSeer report

Exhibit 65: JioMart’s strategic focus

Hybrid

model

Private

label

focus

Tier II

+

reach

Fresh

offerings

Discounts

Free

delivery

Source: RedSeer report

Exhibit 66:

JioMart’s B2C order flow

Source: RedSeer report

4 June 2021

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Retail

Grofers

Started in CY13, Grofers was among the first specialist Grocery retailers to target

value buyers with a healthy private label portfolio of nearly 30%. It has a strong

loyalty program for customer retention. It has a unique local partnership-led

delivery model that enhances supply chain turnaround and reduce logistics cost. It

has three delivery models – Scheduled, Express, and Regular (Micro).

Unique inventory/logistics management through local entrepreneurship

model

Grofers has a significantly leveraged the unorganized supply chain via a partnership

model with local entrepreneurs (like travel agents and mobile recharge shop

owners) to improve supply chain flexibility and cost. The packaged order goes to

micro warehousing stores (drop points) managed by local entrepreneurs who are in

close proximity to customers and deliver to their doorstep. About 95% of orders are

fulfilled by the local network close to customers.

Cluster-based approach

Grofers follows a cluster-based expansion strategy to go deeper into Tier II, III, and

IV cities having a population of less than 1m. From a warehouse in Delhi, it is serving

customers in Sonipat, Panipat, Meerut, Chandigarh, Aligarh, Bhiwandi, and

Moradabad.

Loyalty program

It has a loyalty program called Grofers Smart Bachat Club, which offers discounts,

exclusive offers, and priority support. This allows it to: a) improve AOV through

upselling, thus leveraging its fixed and supply chain cost, b) improve customer

stickiness and reduce retention costs, c) forecast sales and therefore aid in

procurement costs. About 70% of GMV is driven by the loyal users on the platform.

Improving unit economics

During the COVID-19 outbreak, unit economics improved significantly, garnering

higher margin through direct brand tie-ups, increased private label sales, and

reduced marketing/cashback spends, owing to organic e-Grocery demand last year

and customer stickiness. Prior to COVID-19, Grofers operated on a contribution

margin of -12% due to higher cash back (6%) and marketing cost (8%). However, in

the COVID-19 phase, its margin returned to 4%, as higher demand led to reduction

in cashback to a mere 1% of its overall portfolio. Similarly, marketing expenses fell

to 1%, cumulatively saving 12%. Higher mix of private labels improved gross margin

by 3% to 15%, while increased demand/AOV led to leverage of supply chain costs.

4 June 2021

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Retail

Exhibit 67: Profile of Grofers

Founded

Founders

CEO

Headquarters

Total funding

Major investors

CY13

Albinder Dhindsa and Saurabh Kumar

Albinder Dhindsa

Gurugram, India

Over USD472m

Tiger Global, Sequoia Capital,

SoftBank Vision Fund, Apoletto Asia,

KTB, and ADCG

Source: RedSeer report

Exhibit 68: Strategic choices of Grofers

Particulars

Target HH

Advertisement

Delivery model

Strategic choices

Convenience first

Value first

Over 280 brands

Over 2,000 SKUs

Scheduled

Express

Micro

Source: RedSeer report

Exhibit 69: Strategic focus of Grofers

Exhibit 70: Grofers’ delivery process

Private

label

Loyalty

program

Customer

centric

shopping

experience

Local

Entrepreneur

led supply

chain

Focused

assortment

Collective

sourcing

(Brands +

Private

labels)

Warehousi

ng

Drop points

managed by

local

entreprene

urs

Doorstep

delivery by

local

entreprene

urs

Cluster-

based

growth

strategy

Source: RedSeer report

Source: RedSeer report

Exhibit 71: Grofers’ unit economics change during COVID-19

Particulars

Commission/margin

Cashback

Supply chain cost

Payment gateway cost

Marketing expense

Contribution margin

Pre COVID

(Dec'19)

12%

(-) 6%

(-) 9%

(-) 1%

(-) 8%

(-) 12%

COVID period

(Jun'20)

15%

(-) 1%

(-) 8%

(-) 1%

(-) 1%

4%

Source: RedSeer report

How the change impacted

profitability

Higher sales of private labels

led to greater margin during

COVID-19

Drop in discount during

COVID-19

Higher AOV during COVID-19,

resulted in a lower cost of

delivery

No major change

Significant reduction during

COVID-19

4 June 2021

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Retail

Financials and valuation – Reliance Retail

Standalone Income Statement

Y/E March

Total Income from Operations

Change (%)

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

Standalone Balance Sheet

Y/E March

Equity Share Capital

Eq. Share Warrants and App. Money

Preference Capital

Total Reserves

Net Worth

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Total Investments

Curr. Assets, Loans and Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability and Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

FY15

161

26.9

153

95.1

8

4.9

3

5

2

1

4

0

4

1

31.1

3

3

-9.4

1.7

FY16

183

13.8

174

95.0

9

5.0

3

6

1

0

5

0

5

2

38.2

3

3

9.9

1.6

FY17

264

44.2

253

95.6

12

4.4

4

8

1

0

8

0

7

3

43.6

4

4

40.4

1.6

FY18

515

94.6

491

95.4

24

4.6

4

19

1

0

19

0

19

6

33.7

12

12

192.8

2.4

FY19

1019

98.1

960

94.2

59

5.8

6

53

6

1

48

0

48

17

34.9

31

31

NA

3.1

FY20

1304

27.9

1212

93.0

91

7.0

11

80

9

3

74

0

74

19

25.4

55

55

NA

4.2

FY21

1181

-9.4

1089

92.2

92

7.8

8

84

4

2

82

0

82

21

25.2

61

61

NA

5.2

FY22E

1755

48.7

1630

92.9

125

7.1

9

116

4

2

115

0

115

29

25.2

86

86

NA

4.9

(INR b)

FY23E

2225

26.7

2059

92.5

166

7.5

10

156

4

2

154

0

154

39

25.2

115

115

NA

5.2

FY15

50

0

0

2

52

17

-6

63

33

13

21

4

5

51

39

2

2

8

17

13

4

0

34

63

FY16

50

0

0

11

61

11

-10

62

35

14

20

5

5

64

52

2

0

9

33

28

5

0

32

62

FY17

50

0

0

18

68

0

-9

60

40

17

23

7

8

70

51

7

3

9

48

39

9

0

22

60

FY18

50

0

0

41

91

34

-6

119

53

21

32

41

5

156

105

22

2

28

116

82

33

0

41

119

FY19

50

0

0

76

126

128

0

254

98

26

72

25

36

211

113

43

3

52

90

41

48

0

121

254

FY20

50

0

0

131

181

47

0

228

114

33

82

88

6

180

93

25

3

58

128

57

71

0

52

228

FY21

97

0

0

618

715

44

0

760

90

41

49

88

5

825

167

69

516

73

208

135

73

1

617

760

FY22E

97

0

0

704

801

44

0

846

106

50

56

88

5

970

221

91

562

96

275

178

96

1

696

846

FY23E

97

0

0

819

916

44

0

961

120

60

60

88

5

1156

280

116

638

122

348

226

122

1

808

961

4 June 2021

35

Retail

Financials and valuation – Reliance Retail

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Fixed Asset Turnover (x)

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Current Ratio

Interest Coverage Ratio

Net Debt/Equity

Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest and Finance Charges

Direct Taxes Paid

(Inc.)/Dec. in WC

CF from Operations

Others

CF from Operating incl. EO

(Inc.)/Dec. in FA

Free Cash Flow

(Pur.)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc./(Dec.) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc./Dec. in Cash

Opening Balance

Closing Balance

FY15

0.6

1.2

10.4

0.0

0.0

5.3

5.4

6.7

4.8

2.6

88

5

29

3.0

3.3

0.2

FY16

0.6

1.3

12.3

0.0

0.0

5.3

5.3

7.0

5.3

3.0

105

4

55

2.0

5.0

0.1

FY17

0.9

1.6

13.7

0.0

0.0

6.6

6.7

9.6

6.6

4.4

70

10

54

1.5

10.3

-0.2

FY18

2.5

3.4

18.2

0.0

0.0

15.7

13.5

22.8

9.7

4.3

74

16

58

1.4

19.1

0.3

FY19

6.3

7.5

25.2

0.0

0.0

29.0

18.7

26.6

10.4

4.0

40

16

15

2.3

8.7

0.7

FY20

11.1

13.3

36.3

0.0

0.0

36.1

25.7

37.5

11.4

5.7

26

7

16

1.4

9.3

0.2

FY21

12.3

13.9

143.4

0.0

0.0

13.7

13.0

44.7

13.1

1.6

52

21

42

4.0

23.6

-0.7

FY22E

17.2

19.0

160.5

0.0

0.0

11.3

11.0

51.1

16.5

2.1

46

19

37

3.5

32.7

-0.7

FY23E

23.1

25.1

183.6

0.0

0.0

13.4

13.0

55.5

18.6

2.3

46

19

37

3.3

43.7

-0.7

FY15

4

3

1

-1

-4

4

0

4

-4

0

1

1

-1

0

23

-2

0

-25

-3

-1

2

2

FY16

5

3

1

-1

2

10

0

11

-4

6

0

0

-5

0

-6

-1

0

0

-7

-1

2

0

FY17

8

4

1

-1

11

22

1

22

-8

14

-3

0

-11

0

-8

-1

0

0

-9

2

0

3

FY18

19

4

1

-5

-15

4

1

5

-48

-43

3

-4

-49

10

34

-1

0

0

43

-1

3

2

FY19

48

6

-1

-10

-33

11

6

17

-47

-30

-7

0

-54

4

94

-6

0

-23

68

32

2

3

FY20

74

11

-2

-11

84

156

9

165

-67

98

18

2

-48

0

-81

-9

0

-27

-117

0

33

3

FY21

82

8

4

-21

-53

20

-2

18

25

43

0

2

27

473

-2

-4

0

0

467

512

33

516

FY22E

115

9

4

-29

-33

66

-2

64

-16

47

0

2

-14

0

0

-4

0

0

-4

46

546

562

FY23E

154

10

4

-39

-36

93

-2

91

-13

78

0

2

-11

0

0

-4

0

0

-4

76

592

638

4 June 2021

36