Essar Steel Expects Hypermart To Rake In $1 Bn In FY17
27 June 2016
Essar Steel expects retail chain Hypermart to clock a billion dollars (about Rs 6,789 crore) in revenue this fiscal on the back of growing demand in the infrastructure and construction sector.
The chain, run by Ruias-promoted steel maker, provides customised services to original equipment manufacturers, retailers as well as small and medium enterprises through a chain of 100 hypermarts and 200-300 franchises.
"We expect to clock USD 1 billion in revenue this fiscal as the concept of steel retail chains has picked up and we are seeing a pick up in sales for flat steel products as well as fabrications," Hypermart CEO Ravi Singh told PTI.
The retail chain expects to sell 1.5 million tonnes (MT) of steel products in 2017-18, a growth of almost 67 percent from 0.9 MT sales it had clocked in 2015-16 fiscal.
"In the last six months, Hypermart has sold 7 lakh tonnes of various steel products. In the last two months alone we have sold 2.39 lakh tonnes. This growth is due to pick up in demand from the construction industry, which is also edging requirement for fabrications," he explained.
Hypermart expects to sell flat steel products worth about Rs 6,000 crore. Besides, another Rs 600-700 crore will come from the fabrication and e-hypermart segment, he added.
At present, the retail market for steel products in India is around 8 MT.
"Essar Hypermart plans to secure 20 percent of this market in current year by growing significantly. Performances in April and May support this trend. This will account for 25 percent of Essar Steel's revenue," Singh said.
Essar Steel had posted a gross revenue of Rs 17,162 crore in 2014-15 fiscal.
Fabrications are an important pillar of urbanisation, Singh said, adding that steel fabrications are a green building solution and Essar Hypermart has been making inroads in the power plant buildings, elevated roads and other customised buildings.
"With a Pan-India network and backing of steel mill (Hazira), we plan to significantly ramp up our volumes by adding warehouses and residential structures. Essar Hypermart plans to be the largest fabricator in India by volume in 2016-17," he noted.
E-Hypermart is a virtual platform that offers material handling equipments, industrial paints, packaging tapes, pipes and Tubes, TMT bars and calibration services, Singh said.
The e-commerce platform of the company is clocking 10 percent of retail sales. The distinction between brick and mortar and internet environment is fading and customers are happy to buy online, he added.
Source : moneycontrol.com