Scripscan:Piramyd Retail Ltd
Cmp:140
Target:250
Duration:6-9 months
Traded in:Nse-bse.
Why i feel piramyd retail can give huge returns going forward:-
1)Piramyd Retail is a lifestyle retail and convenience store chain with over 42 stores spread over more than 10 lakh square feet, operating under the Piramyd Megastore and Trumart brands. The company has been recently acquired by the indiabulls group and its retail plans include an investment of Rs1,500 crore to build 30 hypermarkets over the next 15-18 months.
2)Major advantage of piramyd retail stems from the fact that indiabulls has huge real estate advantage on its side thus hedging out land supply and rentals which has off late become a major cost to the retailers.Indiabulls has also got broking and consumer finance divisions and they plan to acquire several clients through piramyd retails stores making a win-win situation for both the company.
3)Few years ago, Piramyd retail was seen as a strong competitor to players such as Shopper's Stop and pantaloon retail. However, an unclear growth vision saw the company slipping even as the competition picked up steam in recent years and it failed to cash in effectively on the first-mover advantage.With indiabulls behind now the company may just get considered among the leaders over the next few years.
Logic:-Indiabulls since its ipo over the last 4 years has been a 50 bagger.Whatever the group touched transformed into gold.You name it brokerage,real estate,consumer finance.Now it plans to be the leader in the retail sector.With the dynamic and aggresive management am sure they would be able to satiate the desires.
Conclusion:-The Indian retail industry in valued at about $300 billion and is expected to grow to $427 billion in 2010 and $637 billion in 2015.The Indian retailing sector is at an inflexion point where the growth of organised retail and growth in the consumption by Indians is going to adopt a higher growth trajectory. The Indian population is witnessing a significant change in its demographics.A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector are going to be the key growth drivers of the organised retail sector.The company hopes to capitalise on the huge oppurtuinty and it aims to catapult itself in the top league.Now,Piramyd retail is not a valuation play.Its a play on hope,prospects and pedigree vision.I dont wanna assign any target but still for sake of my esteemed members i put a target of 250 to be acheived over the next 2-3 quarters.
Regards,
ARUN
I can be reached at:[email protected]
