Pantaloon Fashion holds 20-25% upside potential: Hemang Jani

In a chat with ET Now, Hemang Jani, Senior VP, Sharekhan, shares his view on Pantaloon Fashions and Retail.

ET Now: What are the key ideas that you are giving out to your clients right now?

Hemang Jani: Currently, we have rolled out a view point in Pantaloon Fashion and Retail. Recently, we attended Aditya Birla Nuvo's analyst meet, where they revealed that the demerged entity of Madura Fashion will be merge into Pantaloon Fashions.

It is going to be a much bigger enterprise with both man and women categories. The overall distribution, and the brands portfolio that Madura has, is quite big. We think that the kind of restructuring which the Pantaloons has undergone after it was acquired by Aditya Birla is huge.

That is reflecting in the way the operating profit margins have improved by 300 basis points. We think that on a consolidated basis, once this entity is renamed as Aditya Birla Fashions in December, it would command a much higher PE multiple from where it is today.

The stock is currently quoting at about Rs 220. We think that there is a case for about 20-25 per cent kind of an uptick on the counter.