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Future Retail’s shares are set to rally 22 per cent in the next 12 months. The stock has surged 128 per cent since January. Sales may jump 25 per cent this year as the company adds to its chain of 1,000-plus stores. Future Retail swung to a profit in the nine months ended December. Revenue jumped almost fourfold. The company has exited non-core businesses and hived off its supply chain infrastructure to a group firm as part of efforts to lower debt. At the same time, it bought smaller chains, including a dairy products retailer Heritage Foods, to expand in the convenience stores segment. This area is expected to grow 43 per cent annually in the next five years.

Future Retail’s after-tax profit aims to touch Rs 895 crores by March 2020, driven by a 31 per cent yearly growth in revenue from convenience stores in the period and a decline in inventory levels. Future Retail is a food-to-fashion retailer. Heritage, Nilgiris, Easyday are the high potential convenience formats which could contribute to the company’s bottom line in the future. Investors are warming up to India’s brick-and-mortar retailers at a time when their online rivals face an intense discount war and eroding valuations.