The Hindu Business Line : Growth hopes trigger rally in Piramyd Retail

PIRAMYD Retail (PRL), which made their debut on bourses recently, rose sharply on Monday on expectation of huge growth prospects in the next few years compared to other retail companies.

In today's trading, the stock rose 16.69 per cent at Rs 187.75 on the BSE with volumes of 26.40 lakh shares; on the NSE it rose 16.6 per cent at Rs 187.15 with volume of 53.16 lakh shares.

According to analysts tracking PRL, the stock is under valued compared to other retail stocks.

The company came out with IPO last month at Rs 120 a share.

"We believe that with the aggressive rollout of stores (by PRL) over the next two years and improved visibility of the numbers, the discount to its peers would significantly reduce," said a report from Edelweiss Securities.

PRL has department store Piramyd Megastore and Trumart, a supermarket.

The company has two-pronged strategy to capitalise on this retail opportunity. It is targeting the growing fashion-conscious consuming class of urban India through

Piramyd Megastore. PRL currently has five such stores with areas ranging between 28,000 sq ft and 68,000 sq feet.

For the value conscious consumer, PRL has Trumart that offers high quality as well as convenience. Trumart has nine outlets at present.

"PRL's formats are well positioned to capture the growth opportunity," Edelweiss Securities said. It said PRL's management team, having spent the last five years in this business, has put together a low risk retailing strategy.

Edelweiss said PRL would take its number of supermarkets to 60 and mega stores to 16 by the end of 2008 financial year. "This will increase the combined stores' revenues to Rs 517 crore, a compound annual growth rate of 99 per cent over 2006 to 2008.''