Journal of Positive School Psychology http://journalppw.

com
2022, Vol. 6, No. 2, 2487 – 2498

A COMPARATIVE PROFITABILITY ANALYSIS OF SELECT

RETAIL COMPANIES WITH REFERENCE TO PRE AND
DURING COVID-19 PERIOD

Dr. Babita Kanojia1, Chetan Devashish Bose2

1
Associate Professor-Research Guide
Head of the Department (Commerce) Clara’s College of Commerce, Mumbai
2
Assistant Professor KES Shroff College of Arts and Commerce, Mumbai
1
[email protected] and [email protected]

ABSTRACT
The objective of the article is to evaluate and compare profitability of select retail companies of India.
The research includes top three Retail companies Future Retail Limited, Aditya Birla Fashion & Retail
Limited and Avenue Super Mart Limited, which is also listed in National Stock Exchange. The research
is Quantitative in nature and includes financial records as prescribed by SEBI for analysis. The result
clearly indicates that, Covid-19 has impacted the Retail companies. All the three companies were
financially impacted due to the world-wide pandemic known as Covid-19. The first financial quarter of
Covid-19, from 1st April 2020 to 30th June 2020, has shown decline in Net Profit, Operating Income
and Return on Equity of all the selected Retail companies. Avenue Super Mart Limited has topped in
all the profitable parameters on the basis of comparative analysis of the three companies. However,
Future Retail Limited needs to make changes in their strategy for maintaining or resorting their profit.
This will help the Retail Managers to adopt the best practises followed by the leaders. Finally, the
outcome will enhance the understanding of the impact of Covid-19 on the profitability of Retail
companies, for policy makers, researcher and academicians.
Keywords: Covid-19, Retail Companies and Profitability

INTRODUCTION the consumers. It comprises of all shops, malls

and stores that sells products to buyers.
Indian Economy is struggling with slow
economic activity due to global pandemic The Retail sector composition consist of majorly
situation. Covid-19 is not just a term but a threat Apparel & Footwear, followed by Consumer
for all economy. It has resulted in tremendous durables & IT, Jewellery & Accessories, Health
decrease in global and local trade. India has & Entertainment, Home Décor & Furnishings,
recorded the lowest and slowest growth rate of Beauty & Personal Care and other products. In
5.3% in the last 11 years.1 fact, India is ranked 5th largest global destination
in the retail space. Opening of economy and
simplification of lock down check will help the
RETAIL Retail sector to unleash its potential.

Retail sector which contributes 10 % of India’s Retail giants with huge potential to invest must
Gross Domestic Product witnessing a turbulence take an appropriate step to overcome from
due to Covid-19. It is considered as an important unexpected pandemic circumstances. They must
pillar of its economy. It plays a vital role in take a strategical move. They may also use
positively contributing to GDP and giving various concepts of cost accounting in order to
employment to 8 % of working population. 2 minimize their cost and maximize their output.
Indian Retail Industry includes individuals and They must analyse their financial statements and
groups involve in marketing of ready products to try to take small steps, which will have a greater
Dr. Babita Kanojia et al. 2488

impact on their company. It will help them to Zeller, Donna. (2017) has coined that, retail
recover and boost the economy. owners may find easier to establish themselves
in domestic market but it becomes challenging
when it comes to settle on a global markets. The
PROFITABILITY study provided a better strategy to overcome
from challenges.5
The ability to keep business surviving is
profitability. There is no business which can Sansone, Marcello & Colamatteo, Annarita.
survive for a long run without earning profit. (2017) have studied that, the strength of a Retail
These profits are distributed among business depends on the ability of the
entrepreneurs, employees and other entrepreneur to direct the resources for
stakeholders. However, it was a challenging task favourable outcome.6
for most of the retail giants for maintaining their Covid-19 & Economy
profits during Covid-19.
Agarwal, Ms. S. & Singh, Archna. (2020) have
Every business must calculate or analyse correctly indicated that, Covid-19 will have an
profitability of their firm for keeping a track of adverse effect on Indian economy. However,
its profit. There are various ways to measure a they highlighted a fact that the Covid-19 has
profitability of an organisation, which includes sudden and sort term growth for few
calculation related to Net Profit Margin, businesses. 7
Operating Profit Margin, Gross Profits Margin,
Earning Before Interest and Tax, Return on Roy, Shohini. (2020) has explained that, Covid-
Investment and Return on Capital Employed. 19 had global impact on the world economy. It
Profitability research helps a firm to increase also represented the loss in various sector of the
their earning and thus resulting into optimising economy due to Covid-19.8
opportunities for business.
Research Gap
Through the above review of literatures, it is
REVIEW OF LITERATURE assumed that, there is no such research article
which performed “A Comparative Profitability
In order to proceed, the researchers have Analysis of Select Retail Companies with
identified the following literatures for their Reference to Pre and During Covid-19”
study. The literatures are based on Profitability,
Retail Industry and Covid-19 & Economy
OBJECTIVES OF THE ARTICLE
PROFITABILITY The following objectives has been drawn on
the basis of the review of literatures and
Amirthalingam, Nishanthini & Balasundaram, research gap,
Nimalathasan. (2013) have observed
profitability helps to understand the financial 1. To study the impact of Covid-19 on the
ability of a firm. It can be used as a tool to Net Profit of select Retail Companies
differentiate among same class of companies
and it help the company to make policy. 2. To study the impact of Covid-19 on the
Operating Income of select Retail Companies
Tulsian, Monica. (2014) has pointed on an
important fact that, Net Income along cannot be 3. To study the impact of Covid-19 on the
a good indicator of a profitability. So we need to Return on Equity of select Retail Companies
also consider figures related to sales, cost of
goods sold, capital employed, operating
expenses, etc.4 RESEARCH PROBLEMS OF THE
ARTICLE
On the basis of the above objectives, the
RETAIL INDUSTRY following research problem has been identified
2489 Journal of Positive School Psychology

To study, compare and analyse the impact of H1: There is a significant relation between
Covid-19 on the Profitability of select Retail Covid-19 and the Return on Equity of
Companies.
select Retail Companies

HYPOTHESES OF THE ARTICLE

RESEARCH METHODOLOGY
HYPOTHESIS 1
TYPE OF RESEARCH
H0: Covid-19 has no significant effect on the Net
Profit of select Retail Companies The current article is Quantitative in nature as it
deals with the data related to financial
H1: Covid-19 has significant effect on the Net statements. It can be simplified as Comparative
Profit of select Retail Companies research as the article will compare the Net
Profit, Operating Income & Return on Equity of
HYPOTHESIS 2 Per Covid-19 and During Covid-19
H0: Covid-19 has no effect on the Operating SOURCES OF DATA COLLECTION
Income of select Retail Companies
The research is based on secondary data. Here,
H1: Covid-19 has effect on the Operating the researchers have made possible effort to
Income of select Retail Companies collect an authenticated data from the
HYPOTHESIS 3 government recognised websites like NSE,
BSE, SEBI, etc.
H0: There is no significant relation between
Covid-19 and the Return on Equity of SAMPLING

select Retail Companies The researchers have chosen the top 3 list
companies of Retail. Therefore, no sampling
techniques has been used for the given article.
SR. NO. NAMES OF COMPANIES
1 Future Retail Limited
2 Aditya Birla Fashion and Retail Limited
3 Avenue Supermarts Limited

REFERENCE PERIOD OF THE ARTICLE

As the research is to evaluate comparative TOOL AND TECHNIQUES OF DATA
profitability for pre and during Covid-19, ANALYSIS
therefore 3 Quarterly financial report from Pre
Covid-19 period is taken to compare with the 3 In order to draw a strong conclusion, the
Quarterly financial report of During Covid-19 researchers have calculated the mean, variance
period. So, in total 18 months are taken for the and t-Test for Net Profit, Operating Profit and
analyses due to constrain of data. Here, 9 months Return on Equity of select Retail Companies.
of Pre Covid-19 period includes financial data For Future Retail Limited (Net Profit)
from July 2019 to March 2020 and 9 months of
During Covid-19 period includes financial data
from April 2020 to December 2020.

t-Test: Paired Two Sample for Means

Dr. Babita Kanojia et al. 2490

Variable 1 Variable 2
Mean -42.88666667 -693.24
Variance 137210.4974 20810.56
Observations 3 3
Pearson Correlation 0.888129615
Hypothesized Mean Difference 0
df 2
t Stat 4.484146187
P(T<=t) one-tail 0.02315274
t Critical one-tail 2.91998558
P(T<=t) two-tail 0.04630548
t Critical two-tail 4.30265273

For Future Retail Limited (Operating Income)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean 4989.653 1419.587
Variance 239643.4 4302.104
Observations 3 3
Pearson Correlation -0.97591
Hypothesized Mean Difference 0
df 2
t Stat 11.16708
P(T<=t) one-tail 0.003962
t Critical one-tail 2.919986
2491 Journal of Positive School Psychology

P(T<=t) two-tail 0.007924

t Critical two-tail 4.302653

For Future Retail Limited (Return on Equity)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean -0.35397 -6.39198
Variance 12.66754 1.767858
Observations 3 3
Pearson Correlation 0.888241
Hypothesized Mean Difference 0
df 2
t Stat 4.259378
P(T<=t) one-tail 0.025472
t Critical one-tail 2.919986
P(T<=t) two-tail 0.050944
t Critical two-tail 4.302653

For Aditya Birla Fashion & Retail Limited (Net Profit)

Dr. Babita Kanojia et al. 2492

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean -55.5833 -171.6
Variance 5786.631 54429.2
Observations 3 3
Pearson Correlation -0.97593
Hypothesized Mean Difference 0
df 2
t Stat 0.652453
P(T<=t) one-tail 0.29054
t Critical one-tail 2.919986
P(T<=t) two-tail 0.58108
t Critical two-tail 4.302653

For Aditya Birla Fashion & Retail Limited (Operating Income)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean 2225.69 1132.517
Variance 142600.5 765799.5
Observations 3 3
Pearson Correlation -0.71825
Hypothesized Mean Difference 0
2493 Journal of Positive School Psychology

df 2
t Stat 1.609987
P(T<=t) one-tail 0.124345
t Critical one-tail 2.919986
P(T<=t) two-tail 0.248691
t Critical two-tail 4.302653

For Aditya Birla Fashion & Retail Limited (Return on Equity)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean -0.07182 -0.219
Variance 0.00966 0.089318
Observations 3 3
Pearson Correlation -0.96917
Hypothesized Mean Difference 0
df 2
t Stat 0.645609
P(T<=t) one-tail 0.292357
t Critical one-tail 2.919986
P(T<=t) two-tail 0.584713
t Critical two-tail 4.302653
Dr. Babita Kanojia et al. 2494

For Avenue Super Mart (Net Profit)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean 338.1933 243.4567
Variance 2900.027 45059.26
Observations 3 3
Pearson Correlation -0.54961
Hypothesized Mean Difference 0
df 2
t Stat 0.666979
P(T<=t) one-tail 0.286718
t Critical one-tail 2.919986
P(T<=t) two-tail 0.573435
t Critical two-tail 4.302653

For Avenue Super Mart (Operating Income)

t-Test: Paired Two Sample for Means
2495 Journal of Positive School Psychology

Variable 1 Variable 2
Mean 6298.16 5494.69
Variance 169384.7 3296384
Observations 3 3
Pearson Correlation 0.168513
Hypothesized Mean Difference 0
df 2
t Stat 0.776269
P(T<=t) one-tail 0.259409
t Critical one-tail 2.919986
P(T<=t) two-tail 0.518819
t Critical two-tail 4.302653

For Avenue Super Mart (Return on Equity)

t-Test: Paired Two Sample for Means

Variable 1 Variable 2
Mean 0.535066 0.375838
Variance 0.008573 0.107385
Observations 3 3
Pearson Correlation -0.6061
Hypothesized Mean Difference 0
df 2
t Stat 0.705676
P(T<=t) one-tail 0.276755
Dr. Babita Kanojia et al. 2496

t Critical one-tail 2.919986

P(T<=t) two-tail 0.553511
t Critical two-tail 4.302653

Comparative Analysis
2497 Journal of Positive School Psychology

SIGNIFICANCE OF THE ARTICLE CONCLUSION

The current article plays a significant role for The researchers conclude the following based
Retail Entrepreneurs, Strategic Managers, on the applied statistical tools and techniques,
Merchandise Managers, Investor and other
stakeholders to adopt an appropriate cost 1. There exists a significant effect of
structure during this pandemic situation, so as to Covid-19 on the Net Profit of Future Retail
survive and sustain for a long run. The survival Limited, Aditya Birla Fashion & Retail Limited
of the Retail companies are largely depends on and Avenue Super Mart Limited. Hence
the Profitability. rejecting the null hypothesis no. 1.
2. There exists a significant effect of
Covid-19 on the Operating Income of Future
SCOPE OF THE ARTICLE Retail Limited, Aditya Birla Fashion & Retail
Limited and Avenue Super Mart Limited. Hence
The following scopes are listed after rejecting the null hypothesis no. 2.
considering all the importance factors
3. There exists a significant effect of
1. Covid-19 on the Return on Equity of FutureT
he article covers only top three listed Retail Retail Limited, Aditya Birla Fashion & Retail
Companies of NSE Limited and Avenue Super Mart Limited. Hence
2. rejecting the null hypothesis no. 3. T
he study is only based on 18 months data, which 4. Net profit of the Avenue Super Mart
includes 9 months data of during Covid-19 Limited is highest followed by Aditya Birla
3. Fashion & Retail Limited and Future RetailI
t will rank the companies on the basis of Limited.
Profitability 5. Operating Income of the Avenue Super
Mart Limited is highest followed by Aditya
Birla Fashion & Retail Limited and Future
LIMITATIONS OF THE ARTICLE Retail Limited.
The study has certain limitations which are 6. Return on Equity of the Avenue Super
listed below, Mart Limited is highest followed by Aditya
Birla Fashion & Retail Limited and Future
1. The article is based on secondary data
Retail Limited.
2. The study includes only top 3 Retail
Companies listed in NSE
3. It only studies the profitability aspects
Dr. Babita Kanojia et al. 2498

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[3] Amirthalingam, Nishanthini &
Balasundaram, Nimalathasan. (2013).
Determinants of profitability: A case
study of listed manufacturing companies
in Sri Lanka. Merit Research Journal of
Art, Social Science and Humanities. 1 (1),
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[4] Tulsian, Monica. (2014). Profitability
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ISSN: 2321-5925. IOSR Journal of
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22.
[5] Zeller, Donna. (2017). The Retail
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[6] Sansone, Marcello & Colamatteo,
Annarita. (2017). Trends and Dynamics in
Retail Industry: Focus on Relational
Proximity. International Business
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[7] Agarwal, Ms. S. & Singh, Archna. (2020).
Covid 19 and It's Impact on Indian
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[8] Roy, Shohini. (2020). ECONOMIC
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