Feb 27, 2013, 03.07 PM | Source: Moneycontrol.com
Motilal Oswal has maintained a neutral rating on Pantaloon Retail with a target price of Rs 199, in its February 26, 2013 research report.
Motilal Oswal (more)
"Pantaloon Retail's (PF) 6QFY12 results are below estimates, with continued miss on profit expectations. Core retail PAT was down 63% YoY to INR70m (est INR161m). Net sales grew 10% to INR31.7b (est INR31.8b), while EBITDA margin was at 8.8% (est 9.2%), as EBITDA grew 6.4% to INR2.78b (est INR2.92b).
Same store performance improved, as expected, led by festive season sales. Same store sales (SSS) growth was 12.7% for Lifestyle division, 5.1% for Value and -3.4% for Home division.
Gross space addition during the quarter stood at ~0.41msf; for the 18 months ended Dec-12, PF ended with 16.38msf of retail space, an addition of 2.93msf.
Core retail EBITDA increased 6.4% to INR2.78b, while margin declined 20bp YoY at 8.8%. Flat interest costs and 38% increase in depreciation expenses led to 63% YoY decline in PBT at INR70m.
Core retail debt as on Dec 31, 2012 stood at INR54b. Management has undertaken several rounds of restructuring, including sale of Pantaloon format business to ABNL and de-merger of fashion business of Pantaloon. Once these transactions are complete, debt will further reduce by INR28.2b, according to management. Core retail debt after including a) OFCD of INR8b (to ABNL) and b) CCD of INR6.8b for Future Value Retail (financial institutions) will stand at INR41b.
Full year consolidated results published by PF include contribution of Future Capital till Sep-12. Consolidated balance sheet is largely core retail business.
Approvals for the above mentioned transactions are expected in March quarter. Post the same, standalone entity will include the current value retail business (Food Bazaar and Big Bazaar), while the consolidated entity will reflect other support businesses - Ecommerce, Logistics etc.
We await clarity on the verticals' financials, post the recent business restructuring initiatives, before revisiting our investment views. Maintain Neutral," says Motilal Oswal research eport.
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