May 26, 2012, 01.00 PM | Source: Moneycontrol.com
Motilal Oswal has maintained neutral rating on Pantaloon Retail, in its May 16, 2012 research report.
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CMD, Motilal Oswal Financial Services (MOFSL) |
“Pantaloon Retail 3QFY12 (June year end) results are below estimates with core retail PAT down 76% YoY to INR120m. EBITDA increased 29.3% due to 110bp YoY margin expansion, 58% higher interest burden and 35% higher depreciation dragged PAT.”
“SSS growth in Value retail and Lifestyle segments declined to 3% each; Home retailing SSS declined by 7.3%. PF has reported expansion in both gross and EBITDA margins across standalone and FVRL due to various cost cutting measures. PF has entered into an agreement to divest 25% stake in Pantaloon format retail stores to Aditya Birla Nuvo (ABNL). PRIL will issue debentures to ABNL worth INR8b at mutually agreed terms, convertible into equity shares of the resulting entity i.e. Pantaloons Format business. PF has also announced capital infusion of IN2b from Bennett Coleman at INR245/share, by way of cash infusion and not equity for advertising. We believe equity dilution post stake sale in Pantaloon format indicates the rising debt pressures on the Group. We withhold estimates beyond FY12 pending clarity on residual operations post Pantaloon format stake sale. The stock trades at 29.3x FY12 EPS estimate of INR4.8. We are Neutral on the stock,” says Motilal Oswal research report.
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