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ABOUT BIRLA SUN LIFE FINANCIAL SERVICES

Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG), has
a strong presence across various financial services verticals that include life insurance,
fund management, distribution & wealth management, security based lending, insurance
broking, private equity and retail broking. The seven companies representing ABFSG are
Birla Sun Life Insurance Company, Birla Sun Life Asset Management Company, Aditya
Birla Money, Aditya Birla Finance, Birla Insurance Advisory & Broking Services, Aditya
Birla Capital Advisors and Apollo Sindhoori Capital Investment. In FY 2010-11, the
consolidated revenues of ABFSG from these businesses crossed Rs. 5023 crores,
registering a growth rate of 38%.

Sun Life Financial is a leading international financial services organisation
providing a diverse range of protection and wealth accumulation products and services to
individuals and corporate customers. Chartered in 1865, Sun Life Financial and its
partners today have operations in key markets worldwide, including Canada, the United
States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia,
India, China and Bermuda. As of December 31, 2011, the Sun Life Financial group of
companies had total assets under management of $421 billion.

Birla Sun Life offers extensive and thoughtfully devised financial services to its
large base of customers across the globe to help them manage their finance in the most
effective way. You can benefit a lot from its wide array of financial services in the areas
of wealth management, mutual funds and insurance plans.

The mutual fund products and services are provided by investment managers of
the Birla Sun Life Asset Management Company Ltd. (BSLAMC). The company has been
formed by the joint efforts of Aditya Birla Group and the Sun Life Financial Services Inc.
of Canada. The wealth management services are exclusively handled by the Birla Sun
Life Distribution Company Limited (BSDL). This is a subsidiary company of the Aditya
Birla Nuvo Ltd. The life insurance business is taken care of by the Birla Sun Life
Insurance Company Limited (BSLI). The tie-up between Aditya Birla Group and
Canada-based Sun Life Financial Inc resulted in the existence of this one of the topnotch
insurance companies in India.
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Types of Birla Sun Life Financial Services
If you want to avail the financial services of Birla Sun Life in the area of mutual funds,
you can look for following investment options:

1. Equity Schemes
o Diversified Fund
o Theme Based Fund
o Sectorial Fund

2. Debt Schemes
o Interval Income Funds
o Fixed Maturity Plan
o Fixed Term Funds
o Short Term Fund
o Long Term Fund
o Floating Fund
o Gilt Fund
o Cash Fund

3. Hybrid Schemes
o Capital Protection Fund
o Balanced Fund
o Fund of Funds
o MIP

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As per wealth management is concerned, you can again depend on the broad
range of products and services of the Birla Sun Life to derive optimum benefits.
Some of the favorable products and services that reflect well-knitted wealth
consolidation strategy of the company are as follows:

1. Products
o Direct Equity
o Mutual Funds
o Structured Products
o Portfolio Management System (PMS)
o Alternate Asset Products
o Loan Against Securities and Mutual Funds
o Real Estate
o Life Insurance
o Gold

2. Services
o Highly proactive services
o Online Portfolio Access
o Regular Portfolio Reviews
o Financial planning
o Research

Insurance plans are the other interesting types of financial services provided by Birla
Sun Life. The variety is again impressive and benefits that can be derived from them are
truly large. Some of its popular insurance schemes are:

1. Birla Sun Life Insurance Premium Back Term Plan
2. BSLI Universal Health Plan
3. Children's Dream Plan
4. Birla Sun Life Insurance Secure 58 Plan
5. Birla Sun Life Insurance Money Back Plus Plan
6. Birla Sun Life Insurance Saral Jeevan Plan
7. Birla Sun Life Insurance Flexi Cash Flow
8. Birla Sun Life Insurance PrimeLife Premier
9. Birla Sun Life Insurance PrimeLife
10. Birla Sun Life Insurance Flexi Life Line
11. Credit Guard Mortgage Plans
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Introduction
&
Research
Methodology
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1.1 General Introduction of the Project:
First country analysis is done.Based on various factors investor comes to know
whether they should park their funds or not.After that retail sector as a whole is
analyzed and than pantaloons retail is analyzed in that sector.

1.2 Objective of the Study

The primary objective of this project is to study the Retail Sector in India and its
impact on the economy as a whole. To analyze the earnings persistence of the
company selected through the following aspects:

1. The general market trend influencing the sector.
2. The impact of qualitative and quantitative factors on the sector and the
company.
3. The scope of the company in near future and the fundamental strength of
the same.
4. To suggest as investment recommendation for the particular stock.

1.3 Scope of the study

The scope of project is limited to Understanding the basics of Fundamental
analysis and Technical analysis and apply it to take a decision of investing in
banking sector and F&O strategies for the same.

1.4 Assumptions:

This project is prepared on the assumption that most of the investment in stock
market is done by the brokers and not by the common man and on the other hand
there are many people who want to invest in stock market but fears as they think
that it is luck game which is not totally true and this might change their way of
thinking.


1.5 Limitations:

1.5.1 There was a limited time period to complete the project.
1.5.2 Lots of data was available on the websites but was not updated.
1.5.3 Bias opinion of the provider of the information.
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1.6 Research Methodology

1.6.1 Research design
Analysis of retail sector.

1.6.2 Collection of Data (Secondary Data)

The major portion of data related to stats and figure is been derived from the
Previous year annual report of the company.

1.6.3 Data Analysis Technique(s) Used

There are 2 technique used. They are as follows:

1. Fundamental Analysis.
2. Technical Analysis.

1.6.4Sample Design

1. Sampling unit- It is focus on Indian banking equity market
2. Sampling size 5 years data
3. Sampling procedure The sample in the study was selected by
convenient sample technique.

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Country
Analysis
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3.1 GDP (Gross Domestic Product)



Confirming fears of a slowdown, India's economy grew by just 7.8 per cent in the fourth
quarter ending March this year, mainly due to poor performance of the manufacturing
sector, as against 9.4 per cent in the same three-month period of the previous fiscal.
However, economic growth, as measured by the Gross Domestic Product (GDP),
improved to 8.5 per cent in 2010-11 from 8 per cent in 2009-10 due to better farm output
and construction activities and financial services performance.
Meanwhile, the GDP growth figures for the first and third quarters of FY'11 have been
revised upward. While the GDP growth figure for Quarter 1 has been pegged at 9.3
percent -- as against the earlier estimate of 8.9 percent -- the Q3 GDP growth has been
revised upward to 8.3 percent from 8.2 percent.


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With regard to GDP growth in the year 2011-12, the initial guidance provided by
Ministry of Finance of 9 percent growth is looking increasingly difficult to achieve. With
time even the government has come around this view and growth projection for the year
2011-12 has been lowered to 8 to 8.5 percent.
The key risks to growth in India in the current year are the negative impact of continuous
tightening of monetary policy by RBI and a slowdown in global growth due to high
international oil prices. Further, although the Indian Meteorological Department has
projected a normal monsoon this year, we will have to wait for more updates to get
clearer picture on the spatial distribution of the monsoon.
3.2 Inflation
Price movement in the country is reflected by the wholesale price index (WPI) and
the consumer price index (CPI). WPI is used to measure thechange in the average
price level of goods traded in the wholesale market, while the Consumer Price Index
(CPI) captures the retail price movement for different sections of consumers.

The inflation rate in India was last reported at 8.62 percent in June of 2011. From
1969 until 2010, the average inflation rate in India was 7.99 percent reaching an
historical high of 34.68 percent in September of 1974 and a record low of -11.31
percent in May of 1976. Inflation rate refers to a general rise in prices measured
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against a standard level of purchasing power. The most well known measures of
Inflation are the CPI which measures consumer prices, and the GDP deflator, which
measures inflation in the whole of the domestic economy.
3.3Foreign Investments

In 2010-11, foreign investment flows into India saw a dip of about 17 percent
over the previous year. Further, this dip is largely on account of a slowdown seen
in case of FDI.
In 2009-10, FDI inflows into India totaled US$ 37.7 billion. In 2010-11, this
figure came down to US$ 27 billion.
Data also shows that of out of the top 25 sectors, 15 sectors have seen a dip in
FDI flows during April Feb 2010-11 compared to the same period in 2009-10.
Sectors like services, construction, housing and real estate, telecommunication
and agricultural services are the ones where investment flows have slowed down
considerably.
In 2010-11, portfolio flows totaled US$ 31.5 billion and were only a tad below
US$ 32.4 billion received in 2009-10.
The outlook for portfolio flows in the current year is not too encouraging. Global
fund managers are particularly concerned over the evolving macro-economic
situation with inflation showing limited signs of abatement and growth slowing
down at a fast clip.
The re-emergence and intensification of the sovereign debt crisis in Europe and the
expected halt of quantitative easing policy in the US by the end of June 2011 are also
downside factors for portfolio flows for emerging markets including India

3.4Indias Business Confidence

In India, business confidence declined to 145.2 in July of 2011 from 145.3 in April of
2011. In India, the NCAER (National Council of Applied Economic Research) -
MasterCard Worldwide Index of Business Confidence measures the level of optimism
that people who run companies have about the performance of the economy and how they
feel about their organizations prospects. Survey incorporates four indicators: overall
economic conditions six months from now, financial position of firms six months from
now, investment climate and capacity utilisation level. Data is collected through personal
interviews and questionnaires sent to a diverse range of businesses across various regions
in India.

The following is the chart of Business Confidence of India from Jan 2000 to August
2011:

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3.5Unemployment

The unemployment rate in India was last reported at 10.8 percent in the year 2010. From
1983 until 2000, India's Unemployment Rate averaged 7.20 percent reaching an historical
high of 8.30 percent in December of 1983 and a record low of 5.99 percent in December
of 1994. The labour force is defined as the number of people employed plus the number
unemployed but seeking work. The non labour force includes those who are not looking
for work, those who are institutionalized and those serving in the military.
The following is the table of Unemployment in India in different years:






Note: This entry contains the percent of the labour force that is without jobs. Substantial
underemployment might be noted.

All such economic indicators not only measure/analyze the present performance of an
economy but also help in predicting and forecasting its future growth prospects


Country 2002 2003 2004 2005 2006 2007 2008 2009 2010
India 8.8 9.5 9.2 8.9 7.8 7.2 6.8 10.7 10.8
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Retail Sector
In India
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4.1 Overview
The retail sector has been at the helm of Indias growth story. The sector has evolved
dramatically from traditional village fairs, street hawkers to resplendent malls and plush outlets,
growing from strength to strength. According to the Indian Council for Research on International
Economic Relations (ICRIER), India is the seventh-largest retail market in the world, and is
expected to grow at a CAGR of over 13% till FY12 Retailing is one of the pillars of the economy
in India and accounts for 13% of GDP




Retail is being considered as one of the biggest beneficiaries of the Indian consumption
story. This is mainly due to rising aspirations and increasing income levels coupled with
low penetration levels.



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4.2 Size of the Industry
The total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12
billion by 2015, according to the BMI India Retail report for the third quarter of 2011.
Robust economic growth, high disposable income with the end-consumer and the rapid
construction of organised retail infrastructure are key factors behind the forecast growth.
Along with the expansion in middle and upper class consumer base, the report identifies
potential in Indias tier-II and tier-III cities as well. The greater availability of personal
credit and a growing vehicle population providing improved mobility also contribute to a
trend towards annual retail sales growth of 12.2 per cent.
Indian retail sector accounts for 22 per cent of the country's gross domestic product
(GDP) and contributes to 8 per cent of the total employment.
Organised vs Unorganised Retailing
The retail industry is divided into organised and unorganised sectors. Over 12 million
outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m
2
) in
size.
Organised retail:
It refers to trading activities undertaken by licensed retailers, that is, those who are
registered for sales tax, income tax, etc. These include the corporate-
backed hypermarkets and retail chains, and also the privately owned large retail
businesses.
Unorganized Retail:
Unorganised retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the local kirana shops, owner manned general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc.
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The Indian retail sector is highly fragmented with more than 90 per cent of its business
being carried out by traditional family run small stores. This provides immense
opportunity for large scale retailers to set-up their operations a slew of organized retail
formats like departmental stores, hypermarkets, supermarkets and specialty stores are
swiftly replacing the traditional formats dramatically altering the retailing landscape in
India. The economic slowdown was a necessary evil for the industry and the retailers
have been taking corrective actions for the mistakes made in the past. Adoption of cost
control measures and sensible expansion of retail space has helped them in posting profits
over last few months.

However, going forward, the organised sectors growth potential will increase due to
globalisation, high economic growth, and changing lifestyle. Moreover, high consumer
spending over the years by the young population (more than 31% of the country is below
14 years) and sharp rise in disposable income are driving the Indian organised retail
sectors growth.
Even small towns and cities are witnessing a major shift in consumer lifestyle and
preferences, and have thus emerged as attractive markets for retailers to expand their
presence.
However the Indian retail market, over the last decade, has been increasingly leaning
towards organised retailing formats. The pattern in domestic retailing is altering in the
favour of organised modern retailing, a big change from the traditional plethora of
unorganised family-owned businesses.
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4.3 Major Drivers for the Growth of Retail Industry
Rapid urbanization,
Changes in shopping pattern,
Demographic dividend
Rise in per capita income
Pro-active measures by the Government


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Organised retail in India is expected to increase from 5 per cent of the total market in
2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015,
Driven by the growth of organised retail coupled with changing consumer habits, food
retail sector in India is set to be more than double to US$ 150 billion by 2025, according
to a report by KPMG.

Although the growth potential in the sector is immense, it is not without challenges that
could slow the pace of growth for new entrants. Rigid regulations, real estate costs, high
personnel costs, lack of basic infrastructure, shrinkage, and highly competitive domestic
retailer groups are some such challenges. Additionally, resource constraints at shopping
mall projects are also delaying completion and disrupting many retailers entry strategies.
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4.4 Impact Of Recession On Retail Sector:

1. Disappointing Footfalls

A large number of retailers have experienced a drop in footfalls which is mirrored by
Same Store Sales(SSS) growth figures.This also adversely effext the time taken to break
even for new stores. Although retailer is trying to combat this slowdown through constant
promotional offers and deep discounts consumers are trying to spend down on their
discretionary spending.




2. Liquidity under pressure

The slowing sales are resulting in lower inventory turnover and increasing working
capital requirements for retailers. This inturn has created liquidity pressure for many
retailers. To free the cash that has been locked a large number of companies have been
trying to reduce the inventories on their books and shorten working capital cycles.



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3. Margin contraction- Interest burden adversely impacts profits

Many retailers have been trying to compensate for falling sales by curtailing Expenses.
This has countered the effect of the top line on operating margins leaving it largely
unaffected. However, with working capital requirements and expansion capital being
financed through sizeable debt, interest costs have significantly dented the bottom line.


Besides the weak economy and the feeble consumer sentiments, the disappointing retail
growth is also attributed to

1. Poor supply chain management and weak support infrastructure:

Poor infrastructure underdeveloped supply chains, lack of strong cold Chains, poor
warehousing facilities, bad roads, etc. have been contributing to increased logistic costs
for the retailers. Globally, the logistics cost component to the total retail price is around
5 percent, while in India it is as high as 10 percent.

2. Absence of a mature Third Party Logistics (3PL) industry:

Poor Infrastructure (roads, communication and power) makes logistics and
Transportation in India extremely difficult. Further, internal operations of Retailers,
such as warehouse processes and distribution, are usually fairly ad hoc and
inefficient.Retailers are keen to outsource their logistics to 3PL. But there is an absence
of a mature 3PL player providing high service levels at competitive prices.

3. Fragmented supply base:

The supply base is highly fragmented with a large number of intermediaries squeezing the
margins of all involved, which also includes the retailer. This not only has an adverse affect
on the margins but also results in cases of mishandling, theft and Increased instances of
shrinkage.

4. Rentals skyrocketing to all time high:

As real estate prices skyrocketed, retail rentals also touched unsustainable levels eating
directly into profit margins of retailers.Untill a few months back, store rentals were 300
to 400 basis points higher than even international markets. Retail rentals in linking road
in Mumbai, South extension in Delhi and brigade road in Bangalore have risen about
50% in last 3 years.

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5. Funding constraints:

A large number of retailers are highly leveraged and rely on fresh equity funding for
growth which is coming to come during recession phase.Banks are increasingly hesistant
to finance retailers in the context of falling demand and low profitability.

6. Rollout delays to compound problems

The organized retail space was expected to receive investments to the tune of USD 25
million over the next 4-5 years. However significant delay in real estate development and
opposition to organized retail has resulted in delays in investment.A large number of
retailers have not been able to meet their stated expansion plans.


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7. Rentals skyrocketing to all time high

As real estate prices skyrocketed, retail rentals also touched unsustainable levels eating
directly into profit margins of retailers.Untill a few months back, store rentals were 300
to 400 basis points higher than even international markets. Retail rentals in linking road
in Mumbai, South extension in Delhi and brigade road in Bangalore have risen about
50% in last 3 years.




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4.5 Retail Investment Trends
Foreign direct investment (FDI) inflows between April 2000 and December 2010,
in single-brand retail trading, stood at US$ 66.69 million, according to the
Department of Industrial Policy and Promotion (DIPP).

Singapore-based CapitaMalls Asia, which develops, owns and manages malls
across Asia, has pledged US$ 400 million to its growth in India up till 2014. Mr
Kevin Chee, CEO and Country Head of CapitaMalls Asia, has said that apart
from funding the two malls that are operational now, this money would be used to
develop seven more malls in India.

Reliance Retail will enter the cash and carry market with "Reliance Market" in
Ahmedabad; the first one to be opened by August 2011.

Ujala fabric whitener maker Jyothy Laboratories has bought Henkel AG's 50. 97
per cent stake in its Indian subsidiary for US$ 137.02 million, including debt and
preference shares, the two companies revealed. The deal includes Henkel's entire
portfolio that includes Henko and Chek detergents, Pril dish cleaners and Fa
deodorant, and rights to the multinational's future launches.

With the launch of its first 'Arvind Experience Store' in Gujarat at Vadodara,
denim major Arvind Ltd. is looking at 100 stores by the end of the financial year
2011-12. The store in Vadodara is the company's eighth in the country after seven
stores in Andhra Pradesh.

Quick food service restaurant chain Subway will set up 45 outlets across the
country by 2011-12 entailing an investment of around US$ 9 million. The
company has now 205 outlets in India and plans to take its count to 250 by the
end of 2011-12.
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4.6 Retail - Government Initiatives

India currently allows 51 per cent FDI in single-brand retail and 100 per cent in
wholesale cash-and-carry operations.

In a landmark decision, the government has eased norms for investments by
foreign companies that are present in India through a joint venture (JV) or a
technical collaboration. Now, the foreign company will not have to seek a no-
objection certificate (NOC) from the Indian partner for investing in the sector
where the joint venture operates.


4.7 Recent development in Retail Sector
India moved closer to a major economic reform, with a committee of secretaries (CoS)
giving an approval in principle for allowing up to 51 per cent foreign direct investment in
multi-brand retail subject to a few conditions, including a minimum 50% investment in
back-end infrastructure, minimum threshold amount of $100 million would not be
considered.
It would also be mandatory for investors to spend 50% of the amount towards building
and maintaining back-end infrastructure such as warehouses, cold-storage and
transportation to set up world-class facilities. Retailers will also not be allowed to set up
shops in cities that have a population of less than one million The companies coming in
with FDI will have to self-declare the investments made in the back-end. There will be no
monitoring body for it. Since investing 50% of the investment in the back-end will be
legal obligation, the companies will have to fulfill it and any violation could be dealt with
seriously.
Investment in back-end infrastructure is the way the consumers and farmers would
benefit.
Since investing 50% of the investment in the back-end will be legal obligation,
the companies will have to fulfill it and any violation could be dealt with seriously.
The move was keenly awaited by global retail companies such as WalMart and
Carrefour.
The decision, when implemented, is expected to bring in huge foreign investments in the
retail sector and help the government counter the charge that it is suffering from a policy
paralysis.
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4.8 Advantages of FDI In Retail Sector:
1. Benefits for the farmers:
Presumably, with the onset of multi-brand retail, the food and packaging industry will
also get an impetus. Though India is the second largest producer of fruits and vegetables,
it has a very limited integrated cold-chain infrastructure. Lack of adequate storage
facilities causes heavy losses to farmers, in terms of wastage in quality and quantity of
produce in general, and of fruits and vegetables in particular. With liberalization, there
could be a complete overhaul of the currently fragmented supply chain infrastructure.
Extensive backward integration by multinational retailers, coupled with their technical
and operational expertise, can hopefully remedy such structural flaws. Also, farmers can
benefit with the farm-to fork ventures with retailers which helps (i) to cut down
intermediaries ; (ii) give better prices to farmers, and (iii) provide stability and economics
of scale which will benefit, in the ultimate analysis, both the farmers and consumers.
2. Improved technology and logistics:
Improved technology in the sphere of processing, grading, handling and packaging of
goods and further technical developments in areas like electronic weighing, billing,
barcode scanning etc. could be a direct consequence of foreign companies opening retail
shops in India,. Further, transportation facilities can get a boost, in the form of increased
number of refrigerated vans and precooling chambers which can help bring down
wastage of goods.
3. Real-estate development:
Retail is closely dependant on real estate as any retailer will require substantial spaces for
setting up business. Real estate in India has gone through a revamp due to the demand of
high-end retail malls and peoples changing perception towards an enjoyable shopping
experience. Thus real estate can get a further facelift in India and receive more
investment with the opening up of FDI in multi-brand retail.
4. Employment opportunity:
FDI in multibrand retail could open up large employment opportunity.Acoording to
National Sample Survey Organisation (NSSO) data of 2007-08, retail trade employed
7.2% of total workforce and provided job opportunity to 33.1 million.These numbers
would increase by multiple times with FDI in retail which would add value and hence
create jobs.
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4.9 Recommendations To Improve Retail Sector
1. Cost Cutting:

Cost cutting with a long term view should be the key focus while making cost
containment choices. In the past Many retailers have made the mistake of cutting those
costs that are easiest and fastest. An effective strategy should be one that identifies the
costs least important to deliveringwhat customers value. This requires a deep
understanding of customers needs and re-evaluating the business activities that actually
deliver what customers value and the ones that do not. This ensures that the costs cut now
do not harm the future potential of the
business.


Eg:In mid 2008, Kishore Biyani announced a new strategy for his group:
Garv se bolo hum kanjoos hain

With this campaign, the company aimed to save USD 36.5 million in a period of one
year.

The idea was to openly accept that cost-cutting needs to be implemented and then
aggressively eliminate inefficiencies. The move ensured that internal overlapping of
functions was avoided within various departments. At the back-end, human resources and
information technology were integrated in an organized manner.

1. Resource optimization:

A retailer has to better manage its backend centers, supply chain and stores while
improving its profitability. Since each customer amongst his millions is defined by a
different buying history, a different buying propensity, and a distinct servicing cost. The
best way to allocate resources depends on the nature of the resources and the constraints
at hand:

2. Improving labor productivity:

Retailers should turn their attention towards employee productivity to boost sales. Many
retailers should slow down the hiring in back-end operations with training staff high on
their agenda

3. Manpower retention and training:

Inspite of a downturn, the requirement for skilled manpower still persists. Companies
need to understand how to retain their most desirable staff while ensuring their future
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development. This becomes a bigger concern particularly when management
development costs are under pressure, as this is a leadership challenge.

One of the common problems with retail firms is that they hire fresh graduates without
any experience in the retail sector. This has led to over-ambitious expansion plans which
has left the firms struggling
.
With scarcity of an experienced talent pool, talent development has tobe brought in-
house. The need is to focus on selected senior managers, to develop their capabilities to
coach and mentor others.

4. Inventory Management:

In any retail operation, restraining inventory cost is of utmost importance. Improper
inventory may result in stock outs for some of the categories whereas excess stock for
others.

Lower inventory turns are likely to have negative impact on ROI and more so for
categories where gross margin is quite In addition, higher inventory may result in
obsolete stock, margin leakages, damages and high carrying cost (interest, space,
handling costs, etc.).




5. Bringing down Real estate costs:

Real estate rentals constitute the biggest cost item for retailers at about 10-15 percent
of sales. Quite frequently, it has been observed that one of the major costs for retail
stores i.e. rental cost is ignored by retailers.

6. Entering into revenue sharing model as against fixed rental model:
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Although previously developers and landlords were unwilling to enter into revenue
sharing model, they are now ready to lease out their empty spaces. The model, under
which retailers share a percentage of their sales with real estate companies is seen as a
fair way of sharing risks between the two stakeholders. Revenue-sharing model increases
the responsibility of the developer to bring in footfalls in the mall by providing good
upkeep of the infrastructure. The model is sustainable during the downturn as the retailers
do not have to take the hit alone. Players can leverage this opportunity by collaborating
with developers to work out a win-win model and a revenue sharing deal.

7. Leveraging Information Technology:

Organized retail in India faces many hurdles in the absence of proper supply-chain
infrastructure and development of effective electronic payment and delivery channels.
The technologies that retailers have deployed over the years, to serve their distributed
networks, are without standards. Going forward, technology is likely to be a key
differentiator to bring about efficiencies, save on costs and offer better services to
customers. The problem with old technology is that there are no standards and in many
instances, one does not integrate with another.

All the elements within the retail industry right from data warehouses, logistics, supply
chain, store management, point of sale, etc. are likely to get impacted positively with the
usage of technology be it RFID, GPS, intelligent video analytics, point-of-sales terminals
or sensor-based shop carts, etc.
Although Indian retail chains have started deploying these technologies, there still exists
challenge to implement them simultaneously and make the process more efficient.
The advantages of implementation of technology could be scaled manifold by carefully
choosing solutions in context of the said business and by use of technology in following
domains:

Manpower training: Retailers need to gear up with good people management
programs. One way this can be done is through certification programmes.

Real Estate Management: Information technology can be leveraged to provide
project management capabilities to monitor the progress of store launches. Timely
launch of retail outlets can provide a good headstartor retailer and save significant
funds as well.

Supply chain visibility: IT can help retailers set up basic forecasting,
replenishment and supplier management solutions to improve supply chain
management. IT can help in maintaining the optimally minimal Inventory
enabling reduced input costs.

Store operations: Innovative use of Intelligent Video Analytics, pointof-
sales terminals and sensor-based shop carts can help retailers
enhance customer experience and simultaneously reduce costs by
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controlling shrinkage.

Logistics management: Retailers can leverage IT for back-end support and 3PL
companies for physical infrastructure such as warehouse space and a
transportation fleet. GPS technology is extremely useful in real time tracking of
the goods moment.

8. Decode consumer behavior:

India is a diverse nation with multi-lingual, cross cultural population spread across
different geographical regions. Retailers have to recognize the fact that a strategy that
holds true for a particular region and set of people may not hold true for others.

While India has a great market potential, most retailers tend to ignore the basic fact about
the diversity of its customer base. Any retailer who does not do his ground work in terms
of understanding his customer needs stands a great risk of failing even with one of the
best models at hand.A case in point is discount shopping in India. Indian discount
shopping is still fragmented because of diverse culture while western retailers are able to
treat the entire customer base as one. This helps them gain benefits of large scale
promotions and offers. The opportunity lies with the Indian retailers to customize
discount seasons based on festivals of different regions. However, annual planning of
sales based on geography and festivals is still at a nascent stage in India.

Retailers should recognize that consumer is the king and cannot be ignored. The true
metric of success may not be in terms of number of new stores added by a company,
rather, increase in same store sales through a thorough understanding of consumer
requirements.


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Page No 29


9. Increasing use of Private Labeling:

Private labels enable retailers to offer quality products and earn higher margins. The
retailer also derives many advantages of using private labels. In-store labels are at least 5-
20 percent cheaper across various categories. This is because they cut out middlemen
costs and pass on the benefit to the consumer. Private labels enhance the bargaining
power of the retailer while negotiating with manufacturer (national/ international) brands.
In the long run, the retailer can use the Private Labels to attract customers to his outlet.
Thus, many retailers are considering increasing their private label offerings significantly.

Advantages of using private label:

1) Gives the opportunities to stand out from the crowd

2) Helps maintain consistency in stocks. Outside brands may or may not be available in
the future leading to a potential loss of customers.

3) Enables retailers to control margins by improving their bargaining power
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10. Venture into under penetrated markets: Rural Retailing

India has witnessed a rapid increase in incomes with per capita incomes soaring to USD
1000 in 2008 from miniscule USD 418 in 1998. The growth has not been restricted to
urban India, as the per capita income in rural India has grown by 50 percent in past 10
years.

The increasing availability of basic infrastructure, improving access to funding,
employment guarantee schemes, better information systems and growing literacy are
together helping bring prosperity to rural households. With additional fiscal incentives
provided by the government, rural India is set to witness further boost in overall farm
incomes.

Overall, there is a huge market which is waiting to be served, ready to splurge, willing to
explore new products and services. Retailers can tap on their wallets given they do their
homework well.

According to India Retail Report 2009 by Images, "India's rural markets offer a sea of
opportunity for the retail sector. The urban-retail split in consumer spending stands at
9:11, with rural India accounting for 55 percent of private retail consumption.


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4.10 Retail Road Ahead
There is a huge untapped opportunity in the retail sector, thus having immense scope for
new entrants, driving large investments into the country. A good talent pool, huge
markets and availability of raw materials at comparatively cheaper costs are expected to
make India lead one of the worlds best retail economies by 2042. The industry is also
slated to be a major employment generator in future.
Supply Players are now moving to Tier II and Tier III cities to increase
penetration and explore untapped markets as Tier I cities have been
explored enough and have reached a saturation level.

Demand Healthy economic growth, changing demographic profile, increasing
disposable incomes, changing consumer tastes and preferences are
some of the key factors that are driving and will continue to drive
growth in the organised retail market in India.

Barriers to
entry


Reforms by India in opening up its economy have greatly improved
trade prospects, but major barriers still exist such as regulatory issues,
supply chain complexities, inefficient infrastructure, automatic approval
not being allowed for foreign investment in retail. But, some of these
are set to change with FDI in multi-brand retail set for approval.

Bargaining
power of
suppliers



The bargaining power of suppliers varies depending upon the target
segment, the format followed, and products on offer. The unorganised
sector has a dominant position, still contributing 95% of the total retail
market. There are few players who have a slight edge over others on
account of being established players and enjoying brand distinction.
Since it is a capital intensive industry, access to capital also plays an
important part for expansion in the space.

Bargaining
power of
customers



High due to wide availability of choice.


Competition High. Competition is characterised by many factors, including
assortment, products, price, quality, service, location, reputation, credit
and availability of retail space etc
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An increasing number of people in India are turning to the services sector for
employment due to the relative low compensation offered by the traditional agriculture
and manufacturing sectors. The Retail Business in India is currently at the point of
inflection. Rapid change with investments to the tune of US $ 25 billion is being planned
by several Indian and multinational companies in the next 5 years. It is a huge industry in
terms of size and according to India Brand Equity Foundation (IBEF), it is valued at
about US$ 395.96 billion. Organised retail is expected to garner about 16-18 percent of
the total retail market (US $ 65-75 billion) in the next 5 years.
According to the Icrier report, the retail business in India is estimated to grow at 13%
from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is
expected to grow at about 10% per annum with sales expected to rise from $ 309 billion
in 2006-07 to $ 496 billion in 2011-12.
[8]
















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Pantaloon Retail

5.1 Company profile:

Founded in 1987, by Mr. Kishore Biyani, Pantaloon Retail in Indias leading Retail
Company. It is the flagship company of the future group. Starting its 1st outlet in 1997,in
Kolkata .It currently has over 16 mn sq. ft. of area under business. The company operates
under multiple formats hypermarket, apparel stores, specialty stores under various
brands including Big Bazaar, Pantaloon, Food Bazaar, Collection, E Zone etc. The
company also operates an online portal, futurebazaar.com

Promoted by Mr. Kishore Biyani, Pantaloon has a strong management team with
significant experience in the retail industry. From being a small retail player in the mid
90s, the company has evolved to become the largest organised retailer in the country.
Pantaloon was amongst the early players to gauge the potential of the organised retail
in the country and the company expanded aggressively to capture market.

Over the years, it has gained immense experience and has developed an in-depth
understanding of the retail industry. Headquartered in Mumbai (Bombay), the company
operates over 16 million square feet of retail space, has over 1000 stores across 73 cities
in India and employs over 30,000 people.

The retail space of the company has increased from 2.7 Mn sq ft in FY06 to over 16.3
Mn sq ft in FY11; during the same period, space addition by players such as Vishal
Retail and Shoppers Stop was only 2.5 Mn sq ft and 0.9 Mn sq ft, respectively
The company has sped past its competitors in terms of size and scale on the
back of this aggressive roll out of stores. We believe the management is fairly
aggressive and very quick in adapting to the changing needs to the consumer









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5.2 Major Milestones

1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser,
Indias first formal trouser brand.
1991 Launch of BARE, the Indian jeans brand.
1992 Initial public offer (IPO) was made in the month of May.
1994 The Pantaloon Shoppe exclusive menswear store in franchisee format launched across the
nation. The company starts the distribution of branded garments through multi-brand retail
outlets across the nation.
1995 John Miller Formal shirt brand launched.
1997 Company enters modern retail with the launch of the first 8000 square feet store, Pantaloons
in Kolkata.
2001 Three Big Bazaar stores launched within a span of 22 days in Kolkata, Bangalore and
Hyderabad.
2002 Food Bazaar, the supermarket chain is launched.
2004 Central - Indias first seamless mall is launched in Bangalore.
2005 Group moves beyond retail, acquires stakes in Galaxy Entertainment, Indus League Clothing
and Planet Retail.
Sets up Indias first real estate investment fund Kshitij to build a chain of shopping malls.
2006 Future Capital Holdings, the companys financial is formed to manage over $1.5 billion in
real estate, private equity and retail infrastructure funds. Plans forays into retailing of
consumer finance products.

Home Town, a home building and improvement products retail chain is launched along with
consumer durables format, Ezone and furniture chain, Furniture Bazaar.
Future Group enters into joint venture agreements to launch insurance products with Italian
insurance major, Generali.
Forms joint ventures with US office stationery retailer, Staples.
2007 Future Group crosses $1 billion turnover mark.
Specialised companies in retail media, logistics, IPR and brand development and retail-led
technology services become operational.

Pantaloon Retail wins the International Retailer of the Year at US-based National Retail
Federation convention in New York and Emerging Retailer of the Year award at the World
Retail Congress held in Barcelona.

Futurebazaar.com becomes Indias most popular shopping portal.
2008 Future Capital Holdings becomes the second group company to make a successful Initial
Public Offering in the Indian capital markets.

Big Bazaar crosses the 100-store mark, marking one of the fastest ever expansion of a
hypermarket format anywhere in the world.

Total operational retail space crosses 10 million square feet mark.

Future Group acquires rural retail chain, Aadhar present in 65 rural locations.
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5.3 BOARD OF DIRECTORS

Mr. Kishore Biyani, Managing Director
Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group Chief
Executive Officer of Future Group.
Mr. Gopikishan Biyani, Director
Gopikishan Biyani is a commerce graduate and has more than twenty years of experience in the textile
business.
Mr. Rakesh Biyani, Wholetime Director
Rakesh Biyani is a commerce graduate and has been actively involved in category management; retail
stores operations, IT and exports. He has been instrumental in the implementation of the various new
retail formats.
Mr. Vijay Biyani, Wholetime Director
Vijay Biyani has more than twenty years of experience in manufacturing, textiles and retail industry and
has been actively involved in the financial, audit and corporate governance related issues within the
company.
Mr. Kailash Bhatia, Wholetime Director
He has over 28 years of valuable experience in the fashion business and has worked with some of the
well known companies like Arvind Mills and Weekender.
Mr. Vijay Kumar Chopra, Independent Director
V.K.Chopra is a fellow member of The Institute of Chartered Accountants of India (ICAI) by profession
and is a Certified Associate of Indian Institute of Bankers (CAIIB). His banking career spans over 31
years and he has served senior management positions in Central Bank of India, Oriental Bank of
Commerce, SIDBI, Corporation Bank and SEBI.
Mr. Shailesh Haribhakti, Independent Director
Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a Certified Internal Auditor.
He is the Deputy Managing Partner of Haribhakti & Co., Chartered Accountants and past president of
Indian merchant Chambers
Mr. S Doreswamy, Independent Director
S. Doreswamy, is a former Chairman and Managing Director of Central Bank of India and serves on the
board of DSP Merrill Lynch Trustee Co and Ceat Limited among others.
Dr. D O Koshy, Independent Director
Dr. Darlie Koshy, a PhD from IIT Delhi and rank holder in MBA headed NID (Ministry of Commerce,
GOI) as Director for 2 terms of office prior to which he was the founding Chairperson of Fashion
Management at the National Institute of Fashion Technology (Ministry of Textiles, GOI). He is
currently the Director General & CEO of ATDC Network of 58 Institutes / Centres and two premier
campuses of Institute of Apparel Management under the aegis of AEPC (Sponsored by Ministry of
Textiles, GOI).


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Page No 37
5.4 Business Structure


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5.5 Expansion Plans

In Q1-2011, Future Group added 0.68msf takes total area under operations to 14.8msf.

The addition was spread across formats - 2 Pantaloons, 1 Central, 5 Big Bazaar, 3 Food
Bazaar and 37 KB's Fair Price stores. In keeping with its limited expansion strategy in the
Electronics vertical, only 1 electronics store was added during the quarter. Of its 5 new
Big Bazaar stores, 1 store each was opened in Hassan and Gangtok for the first time.

The company has opened its 100th KB's Fair Price shop in Delhi and plans to open its
100th in Mumbai in June.
Store openings are getting skewed more and more towards tier-II and tier-III cities to gain
first mover advantage.

To compete emerging players with deep pockets like Hypercity, More, Bharti and Star
India Bazaar have aggressive store opening plans over the next 2-3 years.

The management has maintained its guidance of adding an area of 2-3msf every year.

Challenges

The key challenges facing the company are as follows:

Fund raising:

The Company acknowledges that expansion plans of the company cannot be met from
internal resources. This means that the company has to tap external sources to fund
expansion. The company has recently allotted shares to promoters at SEBI formula price.
It plans to borrow heavily to fund its expansion plans. As a10th consequence of increased
interest payment and depreciation expense, the net profit margins would remain flat.

Competition

Although there are a few stores operating in this segment such as Giant in Hyderabad, it
is mostly international chains such as Wal-Mart and Carrefour that are the better known
names as discount stores worldwide. Meanwhile, the general retailers in Mumbai are not
too pleased about the concept of discount stores.

Company cant figure out from where such stores get their margins. It must have a
feasible revenue model to sustain the venture.

Company is facing limited competition from the organized retailers but strong
Competition exists from the downtown centers unorganized.


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5.6 Pantaloon Competitive Strengths

Strong understanding of the value retail segment

Pantaloon business plan involves implementation of the concept of the value retailing,
targeting the middle and lower middle income groups, which constitute majority of the
population in India. Group/Company intends to provide quality products at competitive
prices.

Group/Company sells a vast range of merchandise across apparels and accessories,
FMCG products, food products and consumer durables. Pantaloon emphasis has been to
maximize the value that the customers derive in spending on goods bought in Pantaloon
stores.

Group/Company endeavor to continuously reduce Pantaloon costs through a variety of
measures, such as, in-house production of apparels, procurement of goods directly from
the small and medium size vendors and manufacturers, efficient logistics and distribution
systems along with customized product mix at Pantaloon stores depending on the
regional customer behavior and preferences. Central to Pantaloon value retail strategy is
to pass on the benefits of cost reduction measures to Pantaloon customers.

Strong and efficient supply chain management

Pantaloon supply chain management involves planning, merchandizing sourcing,
standardization, vendor management, production, logistics, quality control, pilferage
control replacement and replenishment.

It provide a flexibility to adapt to changing patterns in consumer behavior and Pantaloon
ability to add value at various steps/levels.

In particular, Pantaloon supply chain management gains strength from Pantaloon ability
to undertake in-house manufacture, design and development of apparels.

Strong and efficient logistics and distribution network:

Pantaloon distribution and logistics network comprises seven distribution centers. It owns
fleet of 41 trucks, which helps to transport and deliver Pantaloon products in a cost and
time efficient manner.

Pantaloon distribution and logistics set up is well networked and allows to fulfill the store
requisition within short time period of generation and receipt of order, which has helped
us to optimize in-store availability of merchandise and minimize transportation costs.


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Page No 40

Company is in a position to leverage Pantaloon geographical spread

Pantaloon stores and distribution centers are spread in various parts and regions of the
country. This has not only enabled to build Pantaloon brand value but also facilitated to
explore cost-effective sourcing from different locations identify potential markets and
efficiently establish new stores in different locations.

Most of the stores are located in Tier II and Tier III cities, which enable the company to
capture market share in locations where a majority of Pantaloon target customers are
located.

Company makes effective use information technology systems

Company believes that efficient information technology systems, processes and business
applications are essential to handle retail chain of Pantaloon magnitude.

Pantaloon office processes are computerized which support procurement, supply chain
logistics, distribution centers management and store operations including inventory
management and billing.

All Pantaloon stores and distribution centers are connected through a company-wide
virtual network connection which helps to efficiently manage Pantaloon network of
outlets throughout the country.

Concentrated in cities with high potential for organised retail

Pantaloon has expanded its presence across India and currently has stores in 71 cities.
However, the companys strategy of focusing on the top eight cities (includes four
metros and other cities such as Ahmadabad, Pune, Hyderabad and Bangalore) would
help it garner larger revenues, and hence, higher market share.
These top 8 cities account for around 75% of the total organised retail market in top 34
cities in India, and therefore, provide tremendous opportunities. Around 70-75% of
Pantaloons existing space is in these cities; the company also plans to expand the same
over the next few years.


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Pantaloons presence across key cities has competitive edge over its peers, Vishal
Retail and Shoppers Stop. Vishal Retails strategy focuses on Tier II and Tier III cities,
wherein the retail opportunity is only 24-25% within the top 34 cities in the country.

On the other hand, Shoppers Stop is focusing on top cities with only lifestyle retailing
vertical.

Presence in all consumption space across categories

Pantaloon operates in different lines of businesses which cater to almost all
consumption points. It has entered into many JVs to increase its presence in almost all
retail categories. Though the operations in most of these businesses are in the initial
stages, the same is expected to boost the companys profitability in the long run.









Company have a highly experienced and competent management
team:

Company has an experienced management team which is complemented by a
committed workforce. Pantaloon management team comprises of talented
professionals who are highly experience in the retail sector.

This has assisted us in effective management of Pantaloon stores. Company
have created the right balance of performance bonuses and other incentives for
Pantaloon employees.
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5.7 Pantaloon strategy

Company intends to pursue the following strategies in order to consolidate Pantaloon
position as one of the leading operators in the value retail segment in India.

Pantaloon growth strategy is based on:

1. Increasing Pantaloon penetration in the country by leveraging Pantaloon
supply chain, distribution and logistics network.

2. Emphasis on backward integration.

3. Expansion of FMCG.

4. Procurement from low-cost production centers outside India.

5. Increasing customer satisfaction and Pantaloon base of loyal customers.

6. Continue to upgrade information technology systems and processes.

7. Continue to train employees and seek entrepreneurship from employees.
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5.8 Business Analysis of Pantaloon Model

India is not an integrated homogenous market like other western markets its a
hierarchy of markets catering to people at many different income levels, tastes.

Hence its very important to understand the customer and its needs. Pantaloon has been
able to crack this by offering all what the consumers want at different price points.

Pantaloon has created a well niche brand for itself. The company through constant roll
out of different formats is trying to capture the maximum of consumers wallet. It has
been able to target 75% of the consumer wallet.





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Page No 44
5.8 Snapshot of Subsidaries and JVs









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Snapshot of Business lines & Retail Formats



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5.10 PROFIT AND LOSS-PANTALOONS RETAIL (IND) LTD
Jun'10 Jun'09 Jun'08
12 Months 12 Months 12 Months
INCOME:
Sales Turnover 6,316.66 6,661.42 5,295.88
Excise Duty 0 0 0
NET SALES 6,316.66 6,661.42 5,295.88
Other Income 0 0 0
TOTAL INCOME 6,338.99 6,673.50 5,326.81
EXPENDITURE:
Manufacturing Expenses 99.14 115.91 100.66
Material Consumed 4,089.51 4,481.95 3,556.21
Personal Expenses 280.18 275.94 275.78
Selling Expenses 543.13 443.36 372.54
Administrative Expenses 704.26 672.01 527.28
Expenses Capitalised 0 0 0
Provisions Made 0 0 0
TOTAL EXPENDITURE 5,716.22 5,989.17 4,832.47
Operating Profit 600.44 672.25 463.41
EBITDA 622.77 684.33 494.34
Depreciation 161.88 140.05 83.39
Other Write-offs 0 0 0
EBIT 460.89 544.28 410.95
Interest 299.79 317.76 201.45
EBT 161.1 226.52 209.5
Taxes 37.25 75.38 69.68
Profit and Loss for the Year 123.85 151.14 139.82
Non Recurring Items 51.41 -10.29 -13.88
Other Non Cash Adjustments 3.17 -0.2 0.03
Other Adjustments 1.13 0 0
REPORTED PAT 179.56 140.58 125.97
KEY ITEMS
Preference Dividend 0 0 0
Equity Dividend 17.13 11.57 10.67
Equity Dividend (%) 41.54 30.39 33.49
Shares in Issue (Lakhs) 2,061.43 1,903.21 1,592.92
EPS - Annualised (Rs) 8.71 7.39 7.91
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Page No 47

Comments:

1. 1.Net Sales:

Net Sales of the company has increased in the year 2009 as compared to 2008 but it has
decreased in 2010 as compared to 2009.

The reason for the decline is rise in raw material prices, inflation and additional excise
duty. In apparels, raw material costs have been the biggest concern said company
investor update. Though the prices of raw materials such as cotton have reduced, it is still
high when compared to last year.

Moreover apparel prices-increased due to the mandatory 10% excise duty on branded
garments introduced in the Union budget and soaring cotton prices-for the fall in demand.

2.Total expenditure

Total Expenditure of company has increased for both the years .this has happened
because of because the rise in cost of production-raw material, labour and borrowing
costs-have outweighed increase in prices.


3.EBIT:

EBIT increased by 38.60% in 2009 as compared to 2008 but it decreased in the year 2010
by 38.41% as compared to 2009. This is because of reduction in net sales and increase in
total expenditure.

4. Profit and loss:

Profit for the year has increased in the year 2009 compared to 2008 but decreased further
in 2010 because of reduction in net sales and increase in total expenditure.


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SHAREHOLDING PATTERN PANTALOONS RETAIL
LTD



Holder's Name No of Shares % Share Holding
Promoters 90363248 44.92%
ForeignInstitutions 49046511 24.38%
NBanksMutualFunds 15497481 7.70%
FinancialInstitutions 13987235 6.95%
OtherCompanies 13829376 6.88%
GeneralPublic 12900660 6.41%
Others 5369766 2.67%
ForeignNRI 110662 0.06%
Directors 37600 0.02%









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BALANCESHEET-PANTALOONS RETAIL (IND) LTD












































Particulars Jun'10 Jun'09 Jun'08
Liabilities
12
Months
12
Months
12
Months
Share Capital 228.77 60.94 95.12
Reserves & Surplus 2,527.48 2,211.48 1,751.50
Net Worth 2,756.25 2,272.42 1,846.62
Secured Loans 1,236.03 2,525.53 1,991.77
Unsecured Loans 150.19 324.86 200.01
TOTAL LIABILITIES 4,142.47 5,122.81 4,038.40
Assets
Gross Block 1,417.04 1,876.45 1,368.76
(-) Acc. Depreciation 294.89 307.69 170.59
Net Block 1,122.15 1,568.76 1,198.17
Capital Work in Progress. 59.68 345.23 330.64
Investments. 2,002.91 954.03 586.52
Inventories 1,270.67 1,787.84 1,429.84
Sundry Debtors 123.57 177.25 113.16
Cash And Bank 100.54 109.34 121.1
Loans And Advances 452.89 1,211.08 991.66
Total Current Assets 1,947.67 3,285.51 2,655.76
Current Liabilities 965.72 1,010.26 715.11
Provisions 24.22 20.46 17.58
Total Current Liabilities 989.94 1,030.72 732.69
NET CURRENT ASSETS 957.73 2,254.79 1,923.07
Misc. Expenses 0 0 0
TOTAL ASSETS
(A+B+C+D+E)
4,142.47 5,122.81 4,038.40
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Page No 50
Comments:

Reserves and Surplus has increased by 26.26% in2009 as compared to 2008 but
has increased only by 14.28% in 2010 as compared to 2009.
Secured Loans increased during 2009 by 26.79% as compared to 2008 but it
decreased in the year 2010 by 51.05% as compared to the year 2009.
Unsecured Loans also increased in 2009 by 38.43% as compared to 2008 and
decreased in 2010 by 53.76% as compared to previous year
Fixed Assets has increased by 30.93% in the year 2009 as compared to the year
2008 and decreasedeby 28.46% in the year 2010 as compared to 2009.
Capital work in progress increasedby 4.4% in the year 2009 as compared to
previous year and decreased by 82.71% in 2010 compared to 2009.
Investments increased by 62.65% in 2009 as compared to 2008. It further
increased to a great extent in 2010 by 109.9% as compared to 2009.
Inventories increased in 2009 by 25.08% but decreased in the year 2010 by
28.92% as compared to previous year.
Sundry Debtors increased by 56.63% in 2009 as compared to 2008 and it further
decreased to 30.28% in the year 2010 as compared to the year 2009 .
Loans and Advances increased in 2009 by 22.12% as compared to 2008 but has
decreased in 2010 by 62.6%% as compared to 2010.
Current Liabilities increased by 41.27% in 2009 as compared to 2008 but has
decreased in 2010 by 4.40% as compared to previous year.
Provisions has increased by 16.38% in 2009 when compared to 2008 but
increased further to 18.37% in the year 2010 as compared to2009.












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CONTENTS
3Q
FY11
3Q
FY10



Total Revenue 2812 2391
Total RM 2006 1714
RM as % of sales 71 72
Gross Profit 805 677
Gross Margin( %) 28.6 28.3
Staff Cost(SC) 121 102
SC as % of Sales 4.3 4.3
Other Expenses(OE) 436 358
OE as % of sales 15.5 15
Total Expenses(TE) 2564 2173
TE as % of sales 91.2 90.9
EBITDA 248 217
EBITDA % 8.8 9.1
Other Income 3 2
Interest 110 101
Depreciation 66 52
EBIT 182 166
EBIT % 6.5 6.9
PBT 76 66
Extra Ord Items 0 0
Total Tax 25 29


Comments:

1.Pantaloon Retail (PRIL) reported poor performance for 3QFY2011.

The company same-store-sales of 10.3% during the quarter, while lifestyle retailing
stood at 10.2%.
During the quarter, EBITDA margin declined by 30bp to 8.8% (9.1%). PRIL's
presence across price points and categories places it in a better position than its
peers

2. Retail space expansion on track: In 3QFY2011, PRIL added ~0.68mn sq. ft. of retail
space, taking the total space to ~14.8mn sq. ft.

We believe the companys retail space expansion is on track, considering the
companys plan to add 1.2mn1.5mn sq. ft. in 2HFY2011. Retail space expansion
was skewed towards the value-retailing format, which accounted for ~55% of the
retail space addition.

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3. PRILs core retail segment reported 17.6% yoy growth in net sales to `2,812cr.
Same-store-sales came in at 10.3% and 10.2% for value and lifestyle retailing
respectively, during 3QFY2011 (20.9% and 11.5% during 2QFY2011).

Lifestyle retailing witnessed lower growth on account of supply disruption during
the quarter due to hike in excise duty and a sharp increase in key raw-material
(cotton) prices






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Financial Ratios

Ratios Year 2010 Year2009
Debt-equity 0.50 1.3
Inventory turnover
1.30 1.40
Dividend payout ratio
11.16 9.63
Dividend yield ratio(%) 0.23 0.43
ROE 7.00 6.2
ROCE
13.40 11.30
Working capital ratio 0.10 0.20
Net profit margin(%) 3.00 2.20
P/E ratio 41.5 20.24
EPS 9.4 8.0

Comments :

1. Debt-equity ratio:


The ratio is less than 1, which means equity provides majority of financing for the year
2010.But for the year 2009 the ratio is more than 1 which means assets were mainly
financed by debt. But it was well within the limit. As compared to previous year the ratio
has decreased which means company is repaying its debt and concentrating more on
equity for financing.
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Page No 54
2. Inventory turnover:
The inventory turnover ratio is very low for both the years. The low value implies that
company is inefficient in managing the inventory level. The ratio has decreased
compared to previous year implying sales has declined and therefore excess inventory.

3. Dividend payout ratio:-
The ratio is low for both the years which mean that most of the earnings of the company
is ploughed back into business. This is a good sign as lower payout ratio means higher
retained earnings which in turn implies company is in a stronger financial position.

4. Dividend yield ratio:
The ratio has decreased as compared to previous year which is not a good sign from
investors point of view as it indicates that the intending investor is not going to get
effective returns on the proposed investment.

5. Return on equity (ROE):
This ratio has increased compared to previous year. This ratio is of great importance to
the present and prospective shareholders as well as the management of the company. As
the ratio has increased from previous year it reveals how well the resources of the firm
are being used. As the primary objective of business is to maximize its earnings, the
above ratio indicates that the primary objective of business is achieved to greater extent.

6. Return on capital employed:
Looking at this ratio it is clear that the ROCE has increased as compared to previous year
which is clear indication and supports the previous findings that the company is making
profits. It indicates how well the management has used the investment made by owners
and creditors into the business.

7. Net profit margin ratio:
Looking at this ratio it is cleared that net profit margin has decreased previous to last year
as sales was less.

8. Earning per share (EPS):

Comparatively the EPS of the company has increased as compared to previous y ear
which means earning power of the company has increased .this is a good sign revealing
that company is into profits.
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9.P/E ratio:

P/E ratio of the company has increased by almost 100 % which indicates good demand
for shares and high share price and high expectation of future profits.
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5.11 Technical Analysis:




From the above chart, we have analysed that there is a Bump & Run chart.Let us explain
chart in brief with regards to this chart.

Bump & Run Chart Pattern:

Bump Phase: The bump forms with a sharp advance, and prices move further
away from the lead-in trendline. Ideally, the angle of the trendline from the
bump's advance should be about 50% greater than the angle of the trendline
extending up from the lead-in phase. Roughly speaking, this would call for an
angle between 45 and 60 degrees. If it is not possible to measure the angles,then a visual
assessment will suffice.

In the above chart, the Bump phase is analysed at around Rs. 520 in October 2010.

Run Phase: The run phase begins when the pattern breaks support from the leading
trendline. Prices will sometimes hesitate or bounce off the trendline before
breaking through. Once the break occurs, the run phase takes over and the
decline continues.

In the above chart, the Run phase is analysed at around Rs. 430 in last week of November
2010.

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Head & Shoulders chart pattern:

Left Shoulder: While in an uptrend, the left shoulder forms a peak that marks
the high point of the current trend. After making this peak, a decline ensues to
complete the formation of the shoulder (1). The low of the decline usually remains
above the trend line, keeping the uptrend intact.

In the above chart, left shoulder position is analysed at around Rs. 468.

Head: From the low of the left shoulder, an advance begins that exceeds the
previous high and marks the top of the head. After peaking, the low of the
subsequent decline marks the second point of the neckline (2). The low of the
decline usually breaks the uptrend line, putting the uptrend in jeopardy.

In the above chart, head position is analysed at around Rs. 845

Right Shoulder: The advance from the low of the head forms the right shoulder.
This peak is lower than the head (a lower high) and usually in line with the high of
the left shoulder. While symmetry is preferred, sometimes the shoulders can be
out of whack. The decline from the peak of the right shoulder should break the
neckline.

In the above chart, right shoulder position is analysed at around Rs. 468

Neckline: The neckline forms by connecting low points 1 and 2. Low point 1
marks the end of the left shoulder and the beginning of the head. Low point 2
marks the end of the head and the beginning of the right shoulder. Depending on
the relationship between the two low points, the neckline can slope up, slope
down or be horizontal. The slope of the neckline will affect the pattern's degree of
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bearishness: a downward slope is more bearish than an upward slope. Sometimes
more than one low point can be used to form the neckline.

In the above chart, the neck line has been analysed and drawn on the chart.




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5.12 Findings:

1. 1. Higher share of value segment partially shields the company from economic
Downturn:

The current economic slowdown has impacted the sales growth of all major retail
Players, including Pantaloon. However, we believe that the company is better placed
Than most of its competitors to manage the slowdown due to the favorable mix of
Value retailing and presence in major cities.

Pantaloon earns a higher share of revenues from value retailing as compared to its
Peers. As spending in this category is highly non discretionary in nature, the company
is assured of stability in revenues. Value retailing implies a good mix of non
Discretionary (food and other general merchandise) and discretionary (low to medium
Priced apparels and other accessories) spending. The company derives significant
Revenues of around 30% from FMCG segment as against and almost negligible share for
Shoppers Stop.

The curtailment in spending in value retailing segments is expected to be lower than in
the life style segment, which is completely discretionary in nature. This gives Pantaloon
an edge over players such as Shoppers Stop and Trent, who primarily operate in the
lifestyle segment.

2. Aggressive rollout of retail space:

The management of Pantaloon has indicated retail space target of 25 Mn sq ft by FY13.
However, we expect the addition to be lower and retail space would reach around 21.1
Mn sq ft due to the economic slowdown and delay in retail space completion High debt
levels also likely to dent the companys ambitious expansion plans.

While Shoppers Stop plans to add 0.65 Mn sq ft of retail space over the next 3 years,

3. Improvement in supply chain management to aid efficiency:

After aggressive rollouts of stores, Pantaloon is focussing on its supply chain
management and backend operations to improve efficiency and reduce cost.

The logistics operations have been handed over to its newly formed 100% subsidiary,
Future Logistics. Large distribution centres are being consolidated for better inventory
control and cost rationalisation. All the stores have been linked with designated
warehouse through SAP to control inventory levels at individual stock-keeping units
(SKUs) level.

The above measures are likely to help bring down logistics costs as well as overall
inventory levels. We expect the inventory level as a percentage of sales to reduce from
116 days in FY08 at present to around 84 days by FY13.
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4. New ventures to continue to impact the overall profitability in the medium
Term:

Pantaloon has aggressively diversified its business portfolio over the past couple of
years. The company has forayed into areas such as home solutions (electronics and
furniture business) and insurance (life and non life). In addition, it has ventured into the
financial space through Future Capital Holding. The company has also diversified into
different retail verticals such as mobile phone, kids wear, sportswear etc. It has
entered into a JV with Axiom Telecom for mobile handset retailing.


5. Insurance venture to have long gestation period

Pantaloon has entered into joint ventures for insurance with Generali for both life and
non life insurance. The company has a 25.5% stake in both the JVs. Generali
specializes in distribution of mall assurance products and uses store location for
promoting general and life insurance policies.

Also JV would tap group's employee and vendor base to distribute both life and general
insurance products. However, such businesses typically have long gestation periods of 3-
7 years and have huge fund requirements in the medium term. We believe that venturing
in such long gestation ventures would adversely affect the financials of the company in
the medium term.


We believe that Pantaloons foray into these businesses when its core retail business is
in fast expansion mode would put significant financial stress. The insurance business,
in particular, requires significant financial investments, and this coupled with the long
gestation period, will continue to have an adverse impact on its financial performance.
Further, while some of the new retail verticals have huge potential, they would require
considerable funds for expansion. Therefore, the companys entry into new verticals is
expected to stress its financials in the short to medium term.


Fundamentally stock is good and currently in its expansion phase.

Technically presently stock is at its uptrend. So stock is good from long term point of
view and we recommend a buy on pantaloons.








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Recommendations:


We were asked to sell insurance policies and the company had not provided with
the database of clients. This made it difficult as we had to approach someone from
our contacts. This made the no of proceeds very less. If company had provided
with some kind of database it would be easy to sell policies.

So it would be better if company can provide their interns with database so that
much time is not wasted in finding the prospect and same time we could have
utilized in converting that prospect into a client. This affected our performance
and many interns were not able to achieve their target on time.

Working hours were less that is from morning 9 to 1.Because of constraint of
timing we were just given class room training and never got a single opportunity
to apply this theory knowledge practically.

So company should make some arrangements so that interns can apply their
knowledge practically so they can get better ideas about how things actually work
in real life.

We were given just one plan to sell.ie Birla Sunlife Endowment plan. The tenure
for this plan was 35 years. Due to this tenure many people were not ready to
invest in this plan. They were ready to invest in some other plan of Birla Sunlife
but not in this plan.

So company should provide their interns with more plans so even customer can
get the choice as in where they want to park their funds so that they can get better
returns.











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CONCLUSION


After reading this report, one can learn the basics of FUNDAMENTAL and
TECHNICAL ANALYSIS, and get complete knowledge of the factors he should
consider before investing in the STOCK MARKET.


To summarize, neither fundamental analysis nor technical analysis is more
superior than each other. Both have their merits and should be used at the right
time.
If you are investing for the long-term, the fundamentals analysis plays a more
important role in determining the type of industry and company you choose. The
technical side analysis plays a more important role when deciding the entry and
exit points of your investments.

If you are a speculator, then all you are concerned with is the short-term, hence
the technical charts.

From this report we can conclude that by doing proper analysis of the stock and
then investing in it would minimize the risk involved in losing money in stocks.
After all this analysis, an investor can lose money because at last the market
behavior i.e. whether it is bullish or bearish depends on the buying and selling of
the stocks.
At the end I want to conclude this project again by saying that by doing this
analysis we would reduce risk in stock market but it does not guarantee us that we
will not lose.
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BIBLIOGRAPHY



www.nseindia.com

www.pantaloonsretail.co.in

www.moneycontrol.com

www.ibef.com

www.wikipedia.com




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