Pantaloon Retail is faced with lower capital efficiency ratios: P Phani Sekhar, Angel Broking

In a chat with ET Now, P Phani Sekhar, Fund Manager-PMS, Angel Broking, shares his views on various stocks

ET Now: What is your call on Pantaloon Retail?

P Phani Sekhar: Pantaloon Retail's loss is not a surprise. This is because in January or early part of February, we were told that the retail sentiment had buoyed up. We see store sales growth for January had come down and the trend was not very different three months ago.

So, one needs to understand that the fundamentals on the retail side are not as buoyant as many people believed. The costs are structurally increasing. It is a problem of lower capital efficiency ratios for multiple years that is bogging down many of these companies.

They are faced with a situation where in order to keep the show running, they will have to burn more cash. They do not have the cash to introduce back in the business and that is why all the hullabaloo about FDI in retail.