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Aug 09, 2012, 10.17 AM IST
SP Tulsian, sptulsian.com, says that the result of Pantaloon has again displayed a poor show. For Pantaloon the interest burden has increased by Rs 30 crore from their core retail business operation. One has to really see how the company or the promoters reduce the debt burden.
SP Tulsian, sptulsian.com, says that the result of Pantaloon has again displayed a poor show. For Pantaloon, the interest burden has increased by Rs 30 crore from their core retail business operations. One needs to see how the company or the promoters reduce the debt burden.
Below is the edited transcript of his interview to CNBC-TV18.
A: This is definitely an irrational exuberance. If you compare MMTC with STC then I don't think there is a match. MMTC has an EPS of 25 paise for FY12 and the stock is ruling at Rs 750 because of low float. Similarly case is applies to Hindustan Copper which has a low float of 20-25 bps. So we see this type of exuberance. If one makes a comparison with STC which is ruling quite cheap. It is pure irrational exuberance to take a call on MMTC, Hindustan Copper, Neyveli Lignite and National Fertilizer .
Even if disinvestment goes through and MMTC dilutes its 10% stake then it can fetch a value of more than Rs 2,000-3,000 crore. Which translate into an effective valuation of more than Rs 20,000-25,000 crore for the entire company.
Q: What is your view on Pantaloon's numbers?
A: The numbers are again poor. The interest burden has increased by Rs 30 crore for their core retail operations. The bottom line is purely flat, if one excludes the profit on sell of investments of Rs 258 crore. One has to look for the debt reduction and how the company or the promoters reduces their debt burden and whether the interest burden can really fall that’s the only indication which one has to really keep on.
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