Vishal eyes 100% growth, Rs 5,000 cr turnover by 2010

With an aim to make the most while the sun shines, Vishal Retail Pvt Ltd has decided to double the number of stores from 24 to 60 in the next 12-15 months.

"Though we plan to open a store in every state in the next 3-4 years, most stores in the next 15 months will be set up in the National Capital Region, Uttar Pradesh, Punjab, Haryana, Rajasthan, Chandigarh and Gujarat," said Ram Chander Aggarwal, chairman of Vishal Retail Pvt Ltd.

According to Aggarwal, expansion in Delhi, Gurgaon, Noida and Faridabad will be the immediate focus of the company, and 6-7 stores are likely to be opened in the region by March 2006.

"The organised retail sector in the country is expected to grow at a rate of 25-30 per cent a year, and triple in size to Rs 1.09 trillion in the next five years (by 2010)," Aggarwal said.

According to him, Vishal Retail, which has its store under the Vishal MegaMart brand, is targeting 100 per cent growth this year, and hopes to maintain the same growth rate for the next 3-4 years.

"We are hoping to achieve a turnover of Rs 300 crore in 2005-06 and a Rs 5,000-crore topline in 2010," he said. The company registered a turnover of Rs 147 crore in 2004-05, and Rs 89 crore in 2003-04.

To fund the expansion, the company is also planning to raise about Rs 100 crore from markets in April 2006, by going for an initial public offering (IPO). However, Aggarwal refused to divulge any details about the IPO plan.

At present, the company has stores in Delhi, Agra, Ghaziabad, Varanshi, Meerut, Hissar, Indore, Gwalior, Jaipur, Ludhiana, Patiala, Bhubaneswar, Cuttack, Guwahati, Hyderabad, Pune, Kolkata and Siliguri.

According to Aggarwal, food and grocery are the fastest growing segments of the retail industry. Underlining the potential for growth, he said all major and minor players in the organised retail industry together accounted for not more than 10 per cent of the total market.

He said Vishal MegaMart was focusing on small upcoming cities, as the scope for organised retail growth in such cities was much more than that in big cities.

He said retail outlets would have to become a one-stop solution for meeting all the needs of a family, as was in the west and other developed countries. He said this trend was in a stage of infancy in the country. "The next 3-4 years will be the deciding period for the retail industry," he said.

The company sources household items from China, and has also opened an office in the Yiwu town. The company imports cookery, plastic products, luggage and other items worth about Rs 2 crore per month from China. These items account for about 4 per cent of the total sales of the retail chain.

"Our aim is to make available quality products at the cheapest possible rates to customers. For that, we source several items directly from factories," he said.

According to him, Pantaloon Retail (India) Ltd, Shoppers Stop Ltd, Trent Ltd and the Piramal Group were some of the major players and competitors of Vishal MegaMart.

On the issue of foreign competition, he said most Indian companies were strong enough to sustain competition. Also, these companies sourced their products from cheap production centres like India, China and other east Asian countries.

"We will always have a price advantage over them since they cannot sell items produced in developed countries, as they are much costlier," Aggarwal remarked.