RP Sanjiv Goenka group's demerged companies from its flagship firm CESC, into Spencers Retail and CESC Ventures, made lukewarm debuts on bourses Friday but the companies' management is hopeful of better show going forward.
Both Spencers Retail and CESC Ventures hit their respective 5 per cent lower circuits but group chairman Sanjiv Goenka is optimistic about Spencers Retail growth and profitability.
Goenka said that in the first half of the current fiscal Spencers had posted Rs 5.2 crore profit before tax and is a debt free company.
Going forward, the company would focus on profitability with a strategy that emphasises on private label, apparel business including expanding standalone apparel brand stores and strong omni-channel presence, among others.
As of now, private labels account for 13 per cent of total business of Spencers.
Spencers has already opened 19 stores while 9 more are in the offing this fiscal. More stores would be opened in a calibrated manner to minimise capital expenditure, he said.
More From This Section
Goenka, however, said that most of Spencers' expansion would be concentrated in eastern Uttar Pradesh, West Bengal and Andhra Pradesh where the company has a strong back-end and offers higher margin.
Meanwhile, shares of the retail business -- Spencers Retail -- hit a lower circuit of Rs 212.80 on the BSE after listing at Rs 230.
On the NSE, the stock was down at Rs 213.75 after opening at Rs 225.
On the other hand, CESC Ventures was listed at Rs 545, but hit the day's low of Rs 517.75 on NSE. On BSE, the stock was listed at Rs 548 and was down to Rs 520.60, hitting the lower circuit during the the day.
Spencers Retail and CESC Ventures are non-power businesses of the power-generation and distribution major CESC.
CESC shareholders, who had 10 shares, received six shares of Spencers Retail of face value of Rs 5 each under the scheme of arrangement. While the rest of the non-power businesses of CESC such as BPO, real estate and FMCG will be under CESC Ventures, and shareholders received two shares of Rs 10 each.