Retail Sector Q2 Earnings Preview - Poised For Rapid Recovery: ICICI Direct
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ICICI Direct Report
Covid-19 induced lockdowns due to the second wave put the brakes on growth momentum as store operational days dropped to less than 50% in Q1 FY22.
However, post relaxations in lockdowns, companies are witnessing a swift recovery in footfalls.
Revenue recovery rate in Q2 FY22 is hovering in the range of 75-90%, post relaxation from June.
The current recovery appears to be faster in comparison to the previous year as companies had taken several months after reopening (post the first wave) to reach 75-80% of pre Covid-19 levels.
Most of the store network across our coverage companies is now operational (90% plus).
We expect Q2 FY22 to be substantially better and early indicators are signalling a return to near normalcy by the festive season.
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