The largest mall in Kerala, Lulu Mall in Kochi, is still far from achieving profitability, despite over a decade of operations. How far is it from turning a profit? According to a recent report by the credit rating agency ICRA, Lulu International Shopping Malls Private Limited recorded a loss of Rs 130.2 crore for the financial year 2024, marking an improvement from the Rs 205.8 crore loss in the previous year. This raises concerns about the viability of such massive investments in a market where returns are still not forthcoming.
Lulu Mall in Kochi, which opened in March 2013, is not just the largest in Kerala but also the first Lulu Mall in India. Built at a hefty investment of Rs 1600 crore, it spans an enormous 25 lakh square feet, housing a variety of retail outlets, restaurants, an amusement park, and even a five-star hotel.
Despite the grandeur of the project, the path to profitability appears more complicated than anticipated, with the company's losses continuing to be a significant concern. Revenue, however, has shown growth, reaching Rs 4,384.8 crore in 2024, a 35% increase from the previous year, hinting at a long-term recovery strategy.
But it’s not just in Kerala that Lulu is facing this uphill battle. The company has expanded its operations to other states, yet challenges persist. Its first mall outside Kerala opened in Bengaluru in 2021, and by 2023, Lulu expanded further by leasing the Manjeera Mall in Hyderabad. Despite these efforts, the company is still grappling with the pressure of its massive investments, including those in the ongoing projects across Kerala.
What’s the outlook for these developments? Despite ongoing challenges, Lulu is pressing ahead with its expansion plans. The company is set to invest Rs 500-550 crore in 2024-2025 and another Rs 600-650 crore in 2025-2026 to develop new hypermarkets and malls across India. Currently, there are 12 super/hypermarkets in India, with seven, including the one in Kottayam, operating in Kerala. The Lucknow Mall, however, falls under another group company.
In addition, Lulu is continuing to expand its supermarket chain with the launch of Lulu Daily Supermarkets in Kottiyam of Kollam district and Thrissur later this month. Construction of new Lulu Hypermarkets in Tirur and Perinthalmanna is also underway, marking another step in the group's ambitious expansion across the state.
Yet, with financing primarily coming from loans, the sustainability of these ventures remains uncertain, especially when profitability is still a distant goal.
