Pantaloon Retail - March 2013 Results Preview - Motilal Oswal

- We expect PF's core retail sales to grow 7% to INR32.4b in 1QCY13. PF saw ~20% YoY revenue growth during the Sabse Sasta Din sale period around Republic Day.

- Festive demand did not spill over to 4Q though footfalls have not deteriorated much. We expect mid single digit (5-6%) SSS growth in the Value and Lifestyle divisions.

- We estimate EBITDA at INR2.8b, up 1.2%, as operating margin contracts 50bp to 8.7%.

- Adjusted PAT is likely to decline 38% to INR74m, as interest cost remains high.

- Recent deals (AB Nuvo - Pantaloon transaction, restructuring of fashion business) would help alleviate debt strain by nearly 50%. Core retail debt stands at ~INR62b.

- PF has partially sold its stake in Life and General Insurance JV with Generali to IITL and L&T during the quarter. It should receive INR7b of cash once approvals are received.

- The stock trades at 29.3x FY12 EPS. Maintain Neutral.

Source : Equity Bulls

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