Pantaloon’s ’standalone’ sales grow 26% as net profit increase by 12%; share prices flare up on rise of margins

September 30th, 2009 · 1 Comment

Pantaloon Retail (India) Ltd., India’s largest retailer, which took a hit of 54 per cent in consolidated net profit over the previous year (consolidated net profit declining from Rs 219.3 million in FY 2007-08 to Rs 100.7 million in FY 2008-09), has in fact reported an increase of 11.59 per cent in its net profit on a standalone basis (from Rs 1,259.7 million in FY 2007-08 to Rs 1,405.8 million in 2008-09).

While, there was a rise of 31 per cent in consolidated net income (from Rs 58,405.4 million in 2007-08 to 76690.4 million in 2008-09), the growth in standalone net income was a bit lower at 25.60 per cent (from Rs 50,489.1 million in 2007-08 to Rs 63,417.0 million in 2008-09).

Thanks to efforts of the company to contain costs, standalone operating profit of the company went up by 140 basis points (1.4 per cent) as margins grew up from 9.1 per cent in the previous year to 10.5 per cent, during the reporting year (2008-09). This resulted in operating profit leap frogging 46 per cent (2008-09) over the previous year (2007-08). The impact of growin operating margin was greeted by stock exchanges as the company’s share price registered an increase of 2.69% on NSE (Rs 347.55) during the day.

Incidentally, Pantaloon Retail takes July-June period as its financial year, compared to most other Indian companies, who follow April-March period as their financial year.

The stark difference between consolidated and standalone numbers of a company for the same period arise because while the consolidate numbers incorporate pro-rata impact of performances of other group companies in which the reporting company has equity stake, standalone numbers relate specifically to individual performance of the reporting company. As such, standalone results of a company are more important than consolidated results for the purpose of analysing its performance during the reporting period.

Thus, the announced consolidated net sale/income of Rs 76.69 billion (7,669.04 crore) for the year 2008-09 include Rs 1.327 billion (132.7 crore) in net sales of other Kishore Biyani-led Future group companies in which Pantaloon Retail holds financial interst.

The consolidated net profit took a severe hit ) as there was a sharp rise of 87 per cent in interest charges and 70 per cent in depreciation charges during the year (2008-09) under reference. Employee cost also rose by 30 per cent during the year.

Tags: Indian Owned · Kishore Biyani (Future Group) · Lifestyle Segment · Multi-format · Multi-product Categories · Results (Sales/ Financial) · Retail Trends · Value Segment

1 response so far ↓

Arpita // Sep 30, 2009 at 6:13 am

Your report of yesterday depicted severe decline in net profit, however, today’s report presents a much better picture of the company’s performance. You should avoid confusing your readers.

—-While, thanking you for your comments, we wish to observe that our report of yesterday was entirely correct. At that time we had access to consolidated results only. Consolidated results, though not reflecting specific performance, do reflect overall financial health of the company. In order to remove any confusion as well as to enlighten our readers who may not be well versed with financial reporting, we have tried to explain the difference between two result sets. ‘Hope this will as such not result in any confusion.