Pantaloon Retail: Recommendation Review

Retail is probably the most talked about sector today, thanks to the Parliament finally having passed the proposal to allow FDI in it. The advantages of staying ahead of the curve are enormous, and those who have followed our recommendations would agree with this. We had recommended Pantaloon Retail, in DSIJ Vol. 27, Issue No. 5 (dated 26th February, 2012), when the scrip was trading at Rs 192.75. The principal reason for recommending this stock was our conviction about the allowability of FDI in retail, which was supposed to put these retail counters into the limelight.

After our recommendation, the scrip tanked to almost Rs 126.50 per share. However, the recent decision to allow FDI in multi-brand retail has set stocks in this segment on fire, and Pantaloon Retail is currently trading at Rs 243.

Going ahead, there could be stock-specific action in these counters including that of Pantaloon Retail. Hence, at present, it seems to be the right time to book profits in the counter, which would give a good capital appreciation of 26 per cent from where we had recommended it.