Pantaloon Retail India Posts Rs 20 Crore Loss
DSIJ Intelligence / 26 Feb 2013
The clothing giant has managed to post a decent growth in its topline, the bottomline still faces some trouble, indicates its December 2012 quarter results.
Pantaloon Retail India (PRIL) came out with its December 2012 quarter results yesterday post market. The company reported a disappointing loss on a standalone basis. Reacting to the results, its stocks opened lower today in the early trade and it is currently trading lower by 4 per cent to Rs 200 per share. The following table gives us an overall standalone performance of the company for the December 2012 quarter:
| Standalone Numbers of Pantaloon Retail India | |||
|---|---|---|---|
| Particulars | Dec 2012 | Dec 2011 | % change |
| Net Sales/Income from operations | 1252.85 | 1107.97 | 13.08 |
| Total Income From Operations | 1285.54 | 1107.97 | 16.03 |
| Increase/Decrease in Stocks | -214.07 | -29.7 | 620.77 |
| Consumption of Raw Materials | 6.51 | 2.58 | 152.33 |
| Purchase of Traded Goods | 1022.29 | 733.2 | 39.43 |
| Employees Cost | 58.48 | 55.25 | 5.85 |
| Other Expenses | 276.24 | 220.75 | 25.14 |
| Operating Profit | 136.09 | 125.89 | 8.10 |
| Depreciation | 66.23 | 48.24 | 37.29 |
| Other Income | 3.79 | 3.51 | 7.98 |
| Interest | 75.6 | 73.62 | 2.69 |
| Exceptional Items | -15.55 | 0 | - |
| Tax | 2.91 | 1.9 | 53.16 |
| Net Profit/(Loss) | -20.41 | 5.64 | -461.88 |
For the December quarter, the topline of the company increased by 16% to Rs 1285 crore while the net loss stood at Rs 20 crore against a profit of Rs 6 crore in the similar quarter last year. The company posted a muted operating profit growth of 8% to Rs 136 crore on a YoY basis. However, the operating margins decreased substantially by 78 basis points to 10.58% on a YoY basis.
The same store sales growth (SSSG) for the quarter gave mixed signals across various segments. The lifestyle segment grew at a decent rate of 12.7%, while the growth for value retail remained muted to 5.1% and PRIL witnessed a negative growth of 3.4% in the Home retail business. In the quarter, the company added 0.41 million square feet of space, taking its total area to 16.38 million square feet at the end of December 2012.
On a consolidated basis, the company's turnover stood at Rs 20,186 crore while its net profit was seen at Rs 276 crore for the 18 months ending December 31, 2012. One cannot compare its financials with the previous year because PRIL has extended its accounting for six months from June to December 2012.
“After quite a few consecutive quarters of weak consumer sentiments, sales during the festive season improved significantly indicating an improvement in consumer sentiments,” said the press release of PRIL. Overall, we believe that the company posted a decent topline growth although it faced headwinds at the bottomline.
Further, even though the government has given a nod for FDI in multi-retail brand, we believe that the full impact of the same would at least take next a couple of quarters. On the valuation front, PRIL is trading at a TTM PE of around 19x. Because of the dismal profit numbers, we suppose that the shares could see some downside risk and would therefore advise investors to stay away from the counter.
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