Future Consumer Enterprises Ltd

Intimation of change in Schedule of Analyst(s) / Institutional Investor(s) Meeting Download PDF 01 Jun 2016 16:07
Future Consumer Enterprise Ltd has informed BSE regarding “Intimation of change in Schedule of Analyst(s) / Institutional Investor(s) Meeting”.




@priyank9 thanks for initiating this thread. It requires lot of courage to defend a loss making company with lots of negative associated with promoters. I can see potential. Conventional wisdom says that don’t buy into turnaround stories as ratio of failure to success is low. But I am not convinced with this approach. We all make mistake and learn from them and progress in life. Righ? So I am joining discussion here with this newsbyte:

Biggest India Department Store Expects Record Growth for Year: http://www.bloombergquint.com/business/2016/10/06/biggest-india-department-store-expects-record-growth-for-year

Lets keep ideas flowing.

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FCEL has got investors attn…the stock breaks out above its 52 week high and moves forward…The co has started an attractive TV commercial for its food products. In my view, it is a less risky stock as listed Food companies rarely fall in the market. On the contrary, even with a small uptick in profits, they shoot up…

Disc: invested, so biased views is a possibility

Any updates on future consumer rally. Is it the right time to invest?

Hi @nikhilbora

In my view, the price is still low…u shud buy…The food companies
normally do well in any market…In a bear phase they do not sell off much.
FCL has some unqiue moats - one is that the prominent shelf space is
assured for it. And the receivables must be in control…Thanks to its
Future retail linkage which offers them 70% of sales as at this time. And
KB is now a changed man talking about Shareholder value, equity dilution,
return ratios etc…The stock has a long long way to go in my view…Just
buy and go to sleep for 10 yrs…

Disc: Forms 8% of my portfolio…Have vested interest

Any updates on results of future consumer.

Future consumers new Bhujia launches


I feel FCEL is a story that will play out slowly and over coming years. Demands a real long term horizon.

I have few questions in mind on Future Consumer. Wanted to check with in the community if someone has given it a thought.

  1. Why did Future group invested 50 crore in manufacturing capacity in Sri Lanka. There are two questions here, one is why Sri Lanka and other one is why forming a JV and spending critical capital on in house manufacturing if one can have a sourcing agreement.
    Company has mentioned that they will use this location as export hub to Europe and Middle east, given company has spread itself so thin in Indian market, it does not make sense to start thinking about exports

  2. Given 70% of its revenues come from group companies, it carries a risk of giving favourable prices over and above that is required. How is FCEL insulated from that from minority shareholders perspective. Does FCEL publish gross margins earned on group companies revenues versus others.

  3. Current gross margins at 15-17% seem quite low, is it because of low utlisation or its manufacturing facilities or because of lower prices of its products.

FCEL capital turns are too low at 1.46 ( march 2016 ). Its Dec’16 & Sept’16 quarter OPM is under 1%. For it to eke out lets say a 15% ROCE. It would need a capital turns ratio of ~15. The capital employed currently is about 1200 crores which means it would need to sell a mammoth 18000 crores worth of merchandize to achieve that. Its currently doing 1800 crores and needs 10x sales operating at a 1% margin. I dont see how thats going to happen.

Hi guys

Good questions and doubts. And that is precisely why the stock is quoting
at around 4 times FV. If your questions are answered, it will will be at 20
times FV. Have you checked the current price to FV of the food companies
which are from unknown promoters and currently making losses or making
meagre profits. You will be shocked to see the high valuations. And yes -
the sales target for 2022 is Rs 20,000 Cr. And today KB came on CNBC and
told that the growth for next year FY18 is - guess what : 80%… Guys - at a
valuation, even a loss making company could be a good buy…High dependence
of Future stotes currently is a huge advantage…Bcos, they have so much
potential outside the group…

disc: Invested and form 8% of portfolio. Views are biased…

I am not sure what is meant by FV. That is what makes investing interesting. No two investors have exactly the same opinions and in many cases have the exact opposite ones. I would short FCEL and you would go long on it!

Hi Bheeshma

By FV i meant Face Value.

Future Consumer eyeing over 80% growth in FY18: Kishore Biyani

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Future consumer to launch health foods in India

I visited Big Bazaar to check out some FCEL products. Purchased bhujia (got 3 different flavors)… fruit juices/mojito (sunkist), dry fruits (branded as golden harvest). I liked juices, dry fruits were like any other dry fruits, bhujia was not at par with other (bikaji, haldiram) I didn’t like any of the flavors at all. Well, i know, taste is subjective!

I think they are trying too many things simultaneously rather than building their core edibles portfolio gradually by investing in brand building and quality improvement. They obviously stand a good chance, as shelf space is guaranteed. In fact, they were offering customers to taste the juice then and there in the store itself to promote FCEL brand. Many other FCEL products were being sold in separate shelves or makeshift tables with promotional offers. So they are definitely highlighting their own brands. But, the key with edibles is that they should taste at least as good or better than the existing brands for the consumers to switch.


Good scuttlebutt Mridul !!!. Thanks…That is Kishore Biyani…He does not want to build brick by brick…He wants to get it done fast…Hope he succeeds this time.

Disc: Invested 8% of my portfolio…Definitely biased views…

Some sober words from Mr. Biyani.

  1. Look aggressively to reduce debt.
  2. Avoid future debt for growth and mature cash flow led growth
  3. Learn from past mistakes and avoid doing too many things at the same. time.

Disc:Not invested in any Future group company but watching with interest.

If you look at history, kishor Biyani has made same mistakes again and again.

Even earlier, he has said that he won’t do too many things at same time but new ideas keep churning out of his head.

"Sone ki chidiya " was one of his prime idea couple of years back but now he has abandoned it.

Before that it was insurance and finance.

Earlier he said online shopping won’t be profitable and doesn’t pose threat to him.
Then he buys fabfurnish.com in August 2016.

Now he’s saying he will get out of furniture business, both online and offline.

How come strategy got changed within 7 months?

Disclaimer - not invested in future groups and has no plans to invest as well.