Pantaloon Retail's net profit up 34.8% in Q3 FY 11

Pantaloon Retail (India) Limited today said it has registered 34.8% jump in net profit at Rs50.54 crore in third quarter FY 11 as compared to Rs37.49 crore in third quarter FY10 from its core retail business.
    
The core retail business turnover increased by 17.6% from Rs2,390.6 crore in March 2010 to Rs2,811.9 crore in March 2011. This was backed by both increased store expansion and same store sales growth, a company statement said here.
    
On stand-alone basis, the company has registered a net profit of Rs20.10 crore in third quarter FY 11 as against Rs14.07 crore earned in the same period last year. The sales and operating income stood at Rs1,032 crore in March 11 as against Rs935 crore in March 2010.
    
The company added 0.68 million square feet of retail space during the quarter, taking the total operational retail space to 14.85 million square feet. For the quarter ended March 2011, same store sales growth in lifestyle retail stood at 10.2% and 10.3% in value retailing business. Home business clocked 9.1% same store sales growth for the quarter.
    
During the quarter, the company witnessed inflationary pressures across most categories that it operates in. Global trends suggest that non-food inflation especially pertaining and affecting the fashion category, seems to be at an all time high.

While on one side, this is a boon for modern retail enabling higher value realisations per unit, the high input costs, especially of cotton and other fabrics, suggests that margin releases would be tightened, the company said.
    
The imposition of additional excise duty on readymade garment manufacturers and branded apparel is also a concern. Globally, cotton prices surged by over 60% in the recent past due to unabated global demand, especially from China, which accounts for nearly half the world's cotton consumption, it said.
    
To offset higher material costs, price hikes have been taken, but there is a lag in price increase and cost pressure. However, the company believes that an upward price revision around key categories, especially in fashion is inevitable, which would result in the ASP's increasing by about 16% from the current quarter, and hence being value accretive to the business.
    
In the month of January, Pantaloon Retail witnessed record sales in excess of Rs1,100 crore for core retail business, the release said.
    
Continuing with its space expansion, the company has already added nearly 0.5 million square feet of retail space in the month of April 2011 alone, it said.