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Pantaloon Retail (PART.BO)
Research Tactical Idea
We believe the share price will rise relative to the country index over the next 60 days.
News reports (e.g. Economic Times) that the Committee of Secretaries has cleared the proposal to allow foreign direct
investment (FDI) in multi-brand retail is an unequivocal positive for Pantaloon, in our view. Pantaloon has demonstrated
its ability to develop appropriate business models to capture a dominant share of the consumer spending in India. This,
combined with over 15mn sq feet of prime real estate under various successful formats (versus 4-5mn for its nearest
competitor), is likely to make the company a preferred partner among foreign retailers, we believe. We are also excited by
the implications this clearance might have on the FII holding limit for the stock (currently capped at 24%) - any increase
would be likely to drive a significant re-rating for PRIL, in our view.
We estimate that there is about an 80%+ or "highly likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Overweight
Industry View: Attractive
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Pantaloon Retail (PART.BO)
Research Tactical Idea
We believe the share price will rise relative to the country index over the next 60 days.
News reports (e.g. Economic Times) that the Committee of Secretaries has cleared the proposal to allow foreign direct
investment (FDI) in multi-brand retail is an unequivocal positive for Pantaloon, in our view. Pantaloon has demonstrated
its ability to develop appropriate business models to capture a dominant share of the consumer spending in India. This,
combined with over 15mn sq feet of prime real estate under various successful formats (versus 4-5mn for its nearest
competitor), is likely to make the company a preferred partner among foreign retailers, we believe. We are also excited by
the implications this clearance might have on the FII holding limit for the stock (currently capped at 24%) - any increase
would be likely to drive a significant re-rating for PRIL, in our view.
We estimate that there is about an 80%+ or "highly likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Overweight
Industry View: Attractive
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