Summary of AnalysisWeak and conservative sentiments of shoppers, restructuring of PVIL, closure of 4 mega stores isgiving a strong signal of company’s revival strategy. Low PE ratio, PEG ratio less than 1 andgovernment policies regarding FDI has made the stock more attractive.In the short term the stock may hover around 237 – 300. However its long term story is robust sincethe company is doing strong exercise in its operations before anybody does.Pantaloons available at a PE of 18.64 which is quite lower than its industry PE i.e 27. The PE is goingto be 24-28 in the next 1 year at this multiple the price of PVIL can touch to 242-284Financials of last 5 yearsCommentary on financialsPositivesNet profit margin of the company is considerably low compared to its peers but somehowmaintained a positive figure this financial year (FY’11).
Return of equity is also improving but the improve in current asset and quick asset signifies thecompany’s ability to meet its current obligations easily.NegativesHigh Sales turnover which means takes a lot time to clear its inventory or huge amount of inventoryis pilled and company is unable to sell it, whereas the sales recievables is also high if compared to itsnearest peer i.e. shoppers Stop which is about 3.Comments on FY2011 DataRevenue for the year has increased by 32% and increase in miscellaneous expenses dented theoperating margin decreased by -61% otherwise the company is good at numbers.Profit margin is indeed quite low, at around 1%, then its peers whereas the ROE too is not thatimpressive but hoping that company’s consistent hard work will improve it.