Pantaloon Q3 PAT below estimates, down 76% at Rs 12 cr

Net sales increased 8% to Rs 3,026 crore from Rs 2,812 crore year-on-year, which were in-line with estimates.

Pantaloon Retail results included only core retail business, which included performance of all its stores Pantaloons, eZone, Home Town, Big Bazaar, Food Bazaar and Fair Price.

Analysts on average had expected profit after tax at Rs 20 crore and net sales at Rs 3,043 crore during the quarter.

EBITDA moved up by 12% year-on-year to Rs 278 crore for the January-March quarter and operating profit margin improved 40 basis points at 9.2% versus 8.8% during the period. Margins exceeded expectations by around 30 basis points.

Pressure on sales growth continued in quarter with a muted 8% revenue growth while interest costs played a spoilsport at Rs 173 crore, an increase of 57% year-on-year that resulted in 76% decline in profit.

This quarter was marked by extended discount sales period (28 days against 15 days last year).

The company witnessed low SSS (same-store sales) growth across formats. SSS Growth was impacted by weak demand in home and electronic segments.

Company’s apparel business has also not picked up as expected. Space expansion stood at 0.51 million sq ft in Q3FY12.

However, excluding closures, the addition was mere 0.03 million sq ft - significantly lower than around 0.75 million sq ft of addition in last two quarters.

Some of the big box format stores closed in this quarter (2-3 Big Bazaar and Pantaloon stores) and are expected to be opened in different format in next quarter.