FBB Share Price: An in-depth Analysis of its Recent Performance

When it comes to the Indian fashion industry, Fashion Big Bazaar, commonly known as FBB, is a well-known name. It is a subsidiary of Future Retail Ltd, which is India’s second-largest retail company. FBB has been one of the prominent players in the Indian lifestyle and fashion market, with a strong presence across the country. In this article, we will take a closer look at FBB’s share price and how it has performed recently.

Overview of FBB’s Share Price

Since its listing in 2016, FBB’s share price has been volatile, to say the least. The initial public offering (IPO) of Future Retail Ltd, which owns FBB, was oversubscribed 7 times. The share price opened at INR 153, and within a few months, it crossed the INR 200 mark. However, since then, the share price has been on a roller coaster ride, and there have been significant fluctuations in the share price. In November 2017, the share price dropped to INR 275, and in January 2021, it fell to its all-time low of INR 59.35.

However, since then, the share price has shown signs of recovery. As of September 2021, the FBB share price is hovering around the INR 77 mark, which is a positive development. Nevertheless, the share price of FBB is subject to fluctuation, and it is essential to understand the reasons behind these fluctuations.

Factors Impacting FBB’s Share Price

Several factors influence the share price of FBB, including the company’s financial performance, market conditions, and regulatory environment. It is crucial to take a closer look at these factors to understand the reasons behind the fluctuations in FBB’s share price.

Company’s Financial Performance

The financial performance of a company is one of the most critical factors influencing its stock price. FBB’s financial performance has been mixed in recent years. The company’s revenue has been growing steadily over the years, with a CAGR of 22.2% over the last five years. However, the company’s profitability has been impacted due to high competition and increased marketing costs.

In 2020-21, FBB’s revenue declined by 20% YoY, primarily due to the Covid-19 pandemic’s impact on the retail sector. The company’s net profit for the year stood at INR 56 crores, down by 42% YoY. These numbers impacted the share price of FBB, as investors remained cautious about the company’s future growth prospects.

Market Conditions

The retail industry in India is highly competitive, with several players vying for market share. The market conditions, therefore, play a significant role in determining the stock price of retail companies like FBB. The Covid-19 pandemic had a severe impact on the retail industry, with many stores shutting down temporarily, and shopping patterns changing drastically.

The pandemic-induced lockdowns and social distancing measures resulted in a decline in footfalls, lower sales, and inventory losses. These factors impacted the bottom-line of companies like FBB, and their share prices took a hit.

Regulatory Environment

The regulatory environment in India also impacts the share prices of retail companies. For instance, the recent changes in the foreign direct investment (FDI) policy impacted the share prices of companies like Future Retail Ltd, which is the parent company of FBB. The amendments in the FDI policy restricted e-commerce platforms like Amazon and Flipkart from selling products of companies in which they hold equity stakes.

These regulatory changes impacted the share price of Future Retail Ltd, which triggered a legal battle between the company and Amazon. The uncertainty surrounding the legal battle impacted the share price of Future Retail Ltd and its subsidiary, FBB.

Conclusion

FBB’s share price has been volatile in recent times, impacted by several factors, including the company’s financial performance, market conditions, and regulatory environment. While the company’s revenue has been growing steadily, its profitability has been impacted by increasing costs and high competition. The Covid-19 pandemic and the changes in the regulatory environment also impacted the share price of FBB.

Investors need to keep a close watch on FBB’s share price and the factors influencing it to make informed investment decisions. FBB has a robust presence in the Indian retail industry, and with the right strategy, it may bounce back and provide investors with better returns in the future.