Improving mix at Hypercity should help spur Future Retail's margin profile

The stock of Future Retail is down over 26 per cent from its December highs, on worries of margin compression on account of delayed integration with Hypercity, weak performance of smaller format stores in South India, and higher interest costs. The firm is looking at ways of increasing operating profit margins that came in at 5.2 per cent in the December quarter, up 66 basis points over Q3FY18. 

The firm aims to improve same store sales (SSS) of its smaller stores that have been in the negative given deflation in the food and staples category, integration pressures, as well as higher