Buy Pantaloon Retail, target of 400: IIFL

By SiliconIndia   |   Wednesday, September 30, 2009
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Bangalore: Looking at its quarterly performance, IIFL has recommended a buy rating on Pantaloon Retail (PRIL) with a target price of Rs. 400. PRIL's fourth quarter of financial year 2009 (4QFY09) results beat IIFL's estimates at the operating level. PRIL is an India-based retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer marker. It operates over 1000 stores across 61 cities in India. The net profit growth of PRIL showed an accelerating trend quarter on quarter (QoQ), growing at 12 percent, while sales grew by 20 percent. According to IIFL, the same-store-sales (SSS) growth is showing clear signs of recovery. The 4QFY09 SSS grew by 7.7 percent while sales during the festive season in the Eastern region have posted more than 20 percent growth in SSS. With a further improvement expected in the SSS growth, tight cost control, and the new supply chain and private label initiatives, IIFL expects PRIL's margins to improve in the coming days. Consequently, IIFL revises its FY10-11 earnings per share (EPS) estimates by 3-6 percent. With the target price of Rs. 400, if the stock is bought on Tuesday's closing price of Rs. 343.10, the percentage of gain would be 16.58 percent.
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