Multi Bagger : A stock for long term players

ViJiT

Vijith Pujari
Pantaloon Retail

PRIL continues to trade at premium valuations. However, we feel the strong growth outlook and PRIL's market leadership justifies the premium valuations. Our estimates do not factor in the upside from the latest announcements as well as the venture funds and the home furnishing business. These are expected to contribute significantly towards the future profitability of the business. We would incorporate these once the revenue flow becomes visible. However, post the run up in prices we advise a HOLD rating on the stock.

Pantaloon Retail continued to maintain its stellar performance during the December quarter. While sales growth was up by 98%, profit growth was up by 83%. Operating margins were down in line with expectations, as value retailing continued to grow its share in the sales mix. PRIL board also announced some new business initiatives to enter kids wear retailing and a stake in a food manufacturing and marketing company in addition to setting up an NBFC. These new initiatives along with the venture funds as well as home furnishings business is expected to add to the company's existing business.
 
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