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February 18, 2013Pantaloons
Pantaloon Retail (India) Limited is a large Indian retailer firm. It is a part of the Future Group and operates in multiple retail formats in both value and lifestyle segments of the Indian consumer market. Pantaloons India is headquartered in Mumbai, with over 1,000 stores across 71 cities in India. The Company employs over 30,000 people and is the largest listed retailer by market capitalization and revenue.
The company’s brands include:
- Pantaloons – a chain of fashion outlets,
- Big Bazaar – a hypermarket chain and
- Food Bazaar – a supermarket chain.
Read more about FMCG Manufacturers in India.
The company currently serves customers in 93 cities and 60 rural locations across the country through over 17 million square feet of retail space. For the Lifestyle format, company currently has as many as 65 Pantaloons Stores, 41 Central Malls, 40 E-Zone stores, 17 home as well as other 153 stores under its kitty. For Value retailing format it has over 162 Big Bazaar hypermarkets, 46 Food Bazaars and 240 other delivery formats under its retail chain.
Financials
| MARKET CAP (RS CR) | EPS (TTM) |
| 6,058.20 | 12.14 |
| P/E | INDUSTRY P/E |
| 21.55 | 24.91 |
| BOOK VALUE (RS) | PRICE/BOOK |
| 117.35 | 2.23 |
| DIV (%) | DIV YIELD.(%) |
| 45.00% | 0.34% |
Key Ratio Analysis
| Jun-11 | Jun-10 | Jun-09 | Jun-08 | |
| Key Ratios | ||||
| Debt-Equity Ratio | 0.63 | 0.84 | 1.22 | 1.19 |
| Long Term Debt-Equity Ratio | 0.49 | 0.62 | 0.82 | 0.78 |
| Current Ratio | 1.46 | 1.66 | 1.73 | 1.88 |
| Turnover Ratios | ||||
| Fixed Assets | 2.63 | 3.84 | 4.11 | 4.96 |
| Inventory | 2.85 | 4.13 | 4.14 | 4.57 |
| Debtors | 28.01 | 42 | 45.88 | 59.39 |
| ROCE (%) | 6.72 | 9.98 | 11.84 | 12.69 |
| RONW (%) | 2.75 | 5.37 | 6.83 | 8.57 |
Other Financial Ratios
| Jun-11 | Jun-10 | Jun-09 | Jun-08 | |
| Price Earning (P/E) | 90.72 | 48.34 | 42.07 | 44.96 |
| Price to Book Value ( P/BV) | 2.45 | 3.33 | 2.59 | 3.13 |
| EV/EBIDTA | 19.21 | 14.52 | 12.55 | 15.57 |
| Market Cap/Sales | 1.54 | 1.35 | 0.87 | 1.05 |
If we see the debt/equity ratio, it has improved significantly as compared to the previous years but the level of debt on the company’s books continue to be a pain for the business. Currently the company is determined in de-leveraging its balance sheet so as to strengthen its core retail business. Also the company announced its de-merger to separate Pantaloon retail chain from the Pantaloon Retail India Ltd (PRIL). This will help the company improve on its future performance. Aditya Birla Nuvo ltd (ABNL) intends to acquire at least 50.01% stake in the business of Pantaloon Retail, which will be a great move for the company to flourish and expand its market share further.
The recent move by the Government to allow FDI in multi-brand retailing would help the Company to rope any foreign player to further de-leverage its balance sheet. Thus company can currently look for its growth plans in the coming year which was not executed in the previous years due to high debt.
Outlook
It is known that the future of India’s retail market is one of the most sought after sector currently and is expected to cross USD 1.3 trillion by 2020, from the current market size of USD 500 billion. With modern retailing model being accepted by the customers, the current penetration of 5% is expected to grow about six times from the current USD 27 billion to USD 220 billion (Source FICCI Report on Indian Retail Sector).
Factors such as higher incomes, evolving consumption patterns, new technology and lifestyle trends is helping create the demand of organized retail in the country. Increase in rural income as well as urbanization is also one of the key factors for the growth. Thus the sector is expected to grow tremendously in the years to come, and Pantaloons being the market leader in the sector is definitely a good bet currently, provided it sticks to de-leverage its balance sheet to some extent.