HIGHLIGHTS OF THE RAILWAY BUDGET - 2013-14

SIT : 26 Feb 2013
Thrust 
1. Safety; 2. Consolidation; 3. Passenger Amenities; 4. Fiscal Discipline.

Some Achievements/Initiatives 

1.  IR enters the one billion tonne Select Club joining Chinese, Russian and US Railways; 
2.  IR also joins Select Club running freight trains of more than 10000 tonne load; 
3. ‘Fuel Adjustment Component’ concept to be implemented linking tariffs with movement of fuel prices; 
4.  Target of Rs 1000 crore each fixed for Rail Land Development Authority and IR Station Development Corporation to be raised through PPP in 2013-14; 
5. New fund – Debt Service Fund – to be set up to meet committed liabilities of debt servicing for WB and JICA loans for DFC and other future liabilities. 

Measures for improving Safety & Security 

1. Making a Corporate Safety Plan for a ten year period (2014-2024). 
2. Elimination of 10797 level crossings during the 12th Plan and no addition of new LCs to the IR system henceforth. 
3. Introduction of Train Protection Warning System on Automatic Signalling Systems. 
4. Rigorous trials of the indigenously developed Train Collision Avoidance System. 
5. Using 60 kg rails, 260 meter long welded rail panels and improved flash butt welding technology. 
6. Introduction of 160/200 kmph Self Propelled Accident Relief Trains. 
7. Induction of crash worthy LHB coaches with anti-climb feature. 
8. Rehabilitation of identified 17 distressed bridges over next one year. 
9. Provision of comprehensive fire and smoke detection systems. 
10. Provision of portable fire extinguishers in Guard-cum-Brake Vans, AC Coaches and Pantry Cars in all trains. 
11. Use  of fire retardant furnishing materials in coaches.
12. Measures initiated to deal with elephant related accidents. 
13. Four companies of women RPF personnel set up and another 8 to be set up to strengthen the security of rail passengers, especially women passengers. 
14. Recruitment to RPF with 10% vacancies reserved for women. 

Rail Based Industries 

New factories/workshops to be set up: 

1.  a new Forged Wheel Factory at Rae Bareli in collaboration with Rashtriya Ispat Nigam Limited.
2. a Greenfield Mainline Electrical Multiple Units (MEMU) manufacturing facility at Bhilwara (Rajasthan) in collaboration with State Government and BHEL.
3. a Coach Manufacturing Unit in Sonepat District (Haryana) in collaboration with State Government.
4.  a Midlife Rehabilitation Workshop at Kurnool (Andhra Pradesh) in collaboration with the State Government.
5. Bikaner and Pratapgarh workshops to undertake POH of BG wagons.
6. a workshop for repair and rehabilitation of motorized bogies at Misrod (Madhya Pradesh).
7. a new wagon maintenance workshop in Kalahandi (Odisha).
8.  a modern signaling equipment facility at Chandigarh through PPP route.

Green Initiatives 

1. Setting up of Railway Energy Management Company (REMC) to harness potential of solar and wind energy.
2. Setting up of 75 MW capacity windmill plants and energizing 1000 level crossings with solar power.
3.  Deployment of new generation energy efficient electric locomotives and EMUs.
4. More usage of agro-based and recycled paper and ban use of plastic in catering.

Passenger/Rail Users’ Amenities

1.  Identification of 104 important stations for immediate attention to all aspects related to cleanliness.
2.  Progressive extension of bio-toilets on trains.
3. Provision of concrete aprons on platforms with mechanized cleaning Facilities.
4. Extension of On Board Housekeeping Scheme and Clean Train Stations to more stations and trains.
5.  Extension of Unreserved Ticketing System (UTS), Automatic Ticket vending Machines (ATVMs), Coin-operated Ticket Vending Machines (CO-TVMs) and schme of Jan-Sadharan Ticket Booking Sevaks (JTBSs).
6. Setting up of six more Rail Neer bottling plants at Vijayawada, Nagpur,Lalitpur, Bilaspur, Jaipur and Ahmedabad. 
7. Pilot project on select trains to facilitate passengers to contact on board staff through SMS/phone call/e-mail for coach cleanliness and real time feedback.
8. 8-10 more mechanized laundries for quality washing of linen.
9. Provision of announcement facility and electronic display boards in trains.
10. Providing free Wi-Fi facilities on several trains.
11. Upgrading another 60 stations as Adarsh Stations in addition to 980 already selected.
12. Associate voluntary organizations for providing first aid services at railway stations.
13. Introduction of an ‘Anubhuti’ coach in select trains to provide excellent ambience and latest facilities and services.
14. 179 escalators and 400 lifts at A-1 and other major stations to be installed facilitating elderly and differently abled.
15. Affixing Braille stickers with layout of coaches including toilets, provision of wheel chairs and battery operated vehicles at more stations and making coaches wheel-chair friendly.
16. Some JTBS to be reserved for disabled people. 
17. Curbing malpractices in reserved tickets including tatkal scheme.
18. Third party audit and tie up with food testing laboratories for food quality control; ISO certified state-of-the-art base kitchens to be set up in railway premises.
19. Centralized Catering Services Monitoring Cell set up with a toll free number (1800 111 321)

Rail Tourism

1. Launching multi-modal travel package in cooperation with Jammu & Kashmir state government.
2.  Issuing ‘Yatra Parchis’ to pilgrims travelling by rail to Mata Vaishno Devi Shrine at the time of railway ticket booking. 
3. Introduction of an educational tourist train with concessional fares -‘Azadi Express’ – to connect places associated with freedom movement.
4. Introduction of executive lounge at 7 more stations, namely, Bilaspur, Visakhapatnam, Patna, Nagpur, Agra, Jaipur and Bengaluru.

IT Initiatives

1.  ‘Aadhar’ to be used for various passenger and staff related services.
2. Internet ticketing from 0030 hours to 2330 hours.
3.  e-ticketing through mobile phones.
4.  Project of SMS alerts to passengers providing updates on reservation status.
5. Covering larger number of trains under Real Time Information System.
6. Next-Gen e-ticketing system to be rolled out capable of handling 7200 tickets per minute against 2000 now & 1.20 lakh users simultaneously against 40,000 now.

Financial Performance 2012-13

1. Loading target revised to 1007 MT against 1025 MT in BE.
2. Gross Traffic Receipts fixed at `1,25,680 cr in RE, short by `6,872 cr over Budget Estimates.
3.  Ordinary Working Expenses retained at BE level of `84,400 cr; pension payments increased by `1,500 cr to `20,000 cr.
4. Dividend liability to government to be fully discharged.
5. ‘Excess’ of `10,409 cr as against the budget amount of `15,557 cr. 
6. Loan of `3,000 cr taken in 2011-12 fully repaid along with interest. 
7. Operating Ratio of 88.8% as compared to 94.9% in 2011-12.

Budget Estimates 2013-14

1.  Freight loading of 1047 MT, 40 MT more than 2012-13.
2. Passenger growth - 5.2%.
3. Gross Traffic Receipts - `1,43,742 cr i.e. an increase of 18,062 cr over RE, 2012-13.
4. Ordinary Working Expenses - `96,500 cr.
5. Appropriation to DRF at `7,500 cr and to Pension Fund at `22,000 cr.
6. Dividend payment estimated at `6,249 cr.
7. Operating Ratio to be 87.8%.
8. Fund Balances to exceed `12,000 cr. 

Annual Plan 2013-14

1.  Highest ever plan outlay of `63363 cr.
2. Gross Budgetary Support - `26,000 cr
3.  Railway Safety Fund - `2,000 cr
4. Internal Resources - `14,260 cr.
5. EBR - Market Borrowing - `15,103 cr;
6.  EBR - PPP - `6,000 cr.
7. 500 km new lines, 750 km doubling, 450 km gauge conversion targeted in 2013-14.

Fiscal Discipline

1. No supplementary Demands for Grants introduced in Monsoon Session or Winter Session of Parliament;
2. Loan of `3,000 cr repaid fully; 
3. 347 projects prioritized with assured funding;
4. Operationally important projects and also last mile projects to receive liberal funding;
5. A new fund – Debt Service Fund – set up to meet committed liabilities;
6. Stringent targets for efficiencies in maintenance of rolling stock and fuel consumption;
7.  Target to create fund balance of `30,000 cr in the terminal year of the 12th Plan.

Staff Welfare

1. Fund allocation for staff quarters enhanced to Rs 300 cr.
2. Provision of hostel facilities for single women railway employees at all divisional headquarters.
3. Extending treatment facility in case of medical emergency to RELHS beneficiaries to all cities in hospitals empanelled with CGHS and Railways.
4. Condition of barracks to be improved for RPF personnel.
5. Provision of water closets and air conditioners in the locomotive cabs to avoid stress being faced by loco pilots.

Training and Recruitment 

1. 1.52 lakh vacancies being filled up this year out of which 47000 vacancies have been earmarked for weaker sections and physically challenged.
2. Imparting skills to the youth in railway related trades in 25 locations.
3. Setting up of a multi-disciplinary training institute at Nagpur for training in rail related electronics technologies.
4. Setting up of a centralized training institute at Secunderabad – Indian 
5. Railways Institute of Financial Management (IRIFM).
6. Five fellowships in national universities to be instituted to motivate students to study and undertake research on IR related issues at M.Phil and Ph.D. levels.
7. Setting up of a chair at TERI promoting railway related research to reduce carbon footprint.

Sports

1. Railway Teams won 9 National Championships in 2012.
2. Railway Sports Promotion Board awarded the ‘Rashtriya Khel Protsahan Puraskar – 2012’.

Concessions

1. Complimentary card passes to recipients of Rajiv Gandhi Khel Ratna & Dhyan Chand Awards to be valid for travel by 1st Class/2nd AC.
2. Complimentary card passes to Olympic Medalists and Dronacharya Awardees for travel in Rajdhani/ Shatabadi Trains.
3. Travel by Duronto Trains permitted on all card passes issued to sportpersons having facility of travel by Rajdhani/Shatabadi Trains. 
4. Facility of complimentary card passes valid in 1st class/2nd AC extended to parents of posthumous unmarried awardees of Mahavir Chakra, Vir Chakra, Kirti Chakra, Shaurya Chakra, President’s Police Medal for Gallantry and Police Medal for Gallantry. 
5. Police Gallantry awardees to be granted one complimentary pass every year for travel along with one companion in 2nd AC in Rajdhani/Shatabadi Trains.
6. Passes for freedom fighters to be renewed once in three years.

Trains 

1.  67 new Express trains to be introduced.
2. 26 new passenger services, 8 DEMU services and 5 MEMU services to be introduced.
3.  Run of 57 trains to be extended.
4. Frequency of 24 trains to be increased. 

Metropolitan Projects/Sub-urban Services 

1. Introduction of first AC EMU rake on Mumbai suburban network in 2013-14.
2. Introduction of 72 additional services in Mumbai and 18 in Kolkata.
3. Rake length increased from 9 cars to 12 cars for 80 services in Kolkata and 30 services in Chennai.

Tariff Proposals

1.  Proposal for setting up of Railway Tariff Regulatory Authority formulated and at inter-ministerial consultation stage.
2. Fuel Adjustment Component (FAC) linked revision for freight tariff to be implemented from 1st April 2013. 
3. Supplementary charges for super fast trains, reservation fee, clerkage charge, cancellation charge and tatkal charge marginally increased. 
4. Enhanced reservation fee abolished.

Budget 2013 :The balancing act between economics and politics

Live Mint :Niranjan Rajadhyaksha  , Feb 25 2013. 12 47 PM IST

FM will have to convince his audience that the UPA is ready to walk the talk on budgetary discipline even as it prepares for polls

The economics calls for austerity while the politics demands profligacy. Finance minister P. Chidambaram will reveal how he has grappled with this fundamental dilemma when he stands up to present his new budget in Parliament on 28 February, perhaps the last one before the country goes to the polls.

It was easier when Chidambaram presented his previous budget five years ago. The Indian economy was booming, tax revenues were pouring into the coffers, public finances were in fine fettle, and a national election was a year away—the perfect setting to spend Rs.60,000 crore on a farm loan waiver.

The nature of India’s current economic troubles is well known. The economy has lost momentum, inflation is still too high, private investment has collapsed, consumer demand shows early signs of weakness, and households prefer to buy gold rather than put their money in banks. Many of these problems have their roots in economic policy since 2009, which involved a perverse stimulus to consumption in an economy that actually needed more investment.

Chidambaram has brought a welcome focus to our economic problems since he took over as finance minister in July. The dire warning given by the committee on fiscal consolidation headed by Vijay Kelkarseems to have belatedly convinced the leadership of the United Progressive Alliance that the Indian economy is in trouble—in large part because of the spendthrift policies pursued by this very same leadership in the guise of inclusive growth. The first moves in recent months to clear the policy logjam could not have been possible without blessings, however grudging, from the political bosses of the Congress party.

The finance minister has already promised foreign investors that he will draw a “red line” by keeping the fiscal deficit at 5.3% of gross domestic product (GDP), only a bit higher than what was budgeted for in February 2012. The cancellation of the last government bond auction of the year earlier this month is one indication that the fiscal gap will be kept at the promised level. So one bit of good news seems very likely on Thursday, though it remains to be seen whether this will involve accounting jugglery, such as the postponement of subsidy reimbursements to oil and fertilizer companies.

Of course, Chidambaram has gone one step further in his statements. He has said that the fiscal deficit will be brought down by another 50 basis points in 2013-14, to 4.8% of GDP. Two sets of issues are important in this context: how the fiscal gap will be reduced and whether investors think the plan is credible.

Chidambaram would like to base his plan to lower the fiscal deficit on a growth revival that will yield him good revenues. He may even pull a few privatization rabbits out of his hat. But the current economic situation suggests that spending discipline will have to play a far more important role than it did in the boom years.

However, austerity is rarely attractive to politicians, and definitely not in the looming shadow of a general election. It is then quite likely that capital spending and Plan expenditure will face the brunt of the budgetary cuts, which is the main reason why economists will be looking closely at the quality of the fiscal correction rather than just the numerical targets.

The most obvious place to cut spending is subsidies, especially the fuel and fertilizer subsidies that benefit the better off. The Kelkar committee quite rightly pointed out that subsidies pose the greatest fiscal risk to the Indian economy. The first eight months of the current fiscal year have already seen around Rs.67,000 crore of extra subsidy spending compared with the same period of the previous fiscal year. Pruning subsidies will require political courage, though the recent moves on fuel pricing are encouraging.

The balancing between economics and politics will be akin to a high-wire act—with a crowd of worried investors in the audience.

Chidambaram needs to have global investors on his side as a strategic necessity because India needs about $80 billion (around Rs.4.3 trillion) of capital inflows to fund its massive current account deficit, which is still the single biggest risk to economic stability.

Capital has been flowing into India since the middle of 2012 because the international financing environment has been remarkably benign, especially thanks to quantitative easing by Western central banks. The Indian government has also done just enough to keep global investors interested. The resultant gush of foreign capital has ensured that the rupee has been stable despite the yawning trade gap. Some strategic signalling—such as a road map for the introduction of the goods and services tax, a move towards a new direct taxes code and insurance reforms—could help stabilize investor expectations further.

Even a modest fiscal correction plan would be fine if it seems credible. India has had no shortage of ambitious plans for fiscal fitness since 2009. Then finance minister Pranab Mukherjee announced medium-term plans in successive budgets; the 13th Finance Commission put out a fresh set of fiscal targets; more recently, the Kelkar committee reiterated the need for a medium-term fiscal plan.

The public finance mess has persisted despite all the talk. The mothballing of earlier plans to lower the fiscal deficit has raised questions about the credibility of the announcements made by the finance ministry. Further, the fact that inflation has been higher than target for more than three years has possibly hurt the credibility of the inflation goals of the Reserve Bank of India as well.

Getting the Indian economy back on track promises to be a long slog thanks to deep structural fissures, even if there is a mild recovery a few quarters down the line while core inflation abates. Policy statements have to be credible while the damage is being repaired.

So, above all, Chidambaram will have to convince his sceptical audience that the government is ready to walk the talk on budgetary discipline even as it prepares to go to the polls.

Niranjan Rajadhyaksha is executive editor, Mint.

What Rail Budget ’13 says about Budget ’13

Railway minister Pawan Kumar Bansal has put in place a dynamic pricing mechanism that will ensure a pass-through of increase in input prices such as fuel and electricity.
Live mint : Anil Padmanabhan : Tue, Feb 26 2013. 01 53 PM IST

There is cause for hope that the Union budget will focus more on vision than on atmospherics

New Delhi: If the railway budget is any indication, then there is cause for hope that the Union budget will focus more on vision than on atmospherics to grab voter eyeballs.

Railway minister Pawan Kumar Bansal has, in his debut budget, started where former rail minister Dinesh Trivedi left off—rather abruptly at that; he was ousted by his Trinamool Congress party boss Mamata Banerji—and put in place a dynamic pricing mechanism that will ensure a pass-through of increase in input prices such as fuel and electricity. At the same time, Bansal also signalled that Trivedi’s proposal to set up a Tariff Regulatory Authority was in the works and the subject of ongoing inter-ministerial deliberations.

While freight rates will immediately come under the purview of the dynamic pricing mechanism, passenger fares will be spared for now—a concession the minister extended in the light of the fact that fares were increased last month. The plan is to effect revisions twice a year. As in the case of fuel prices, this will work both ways—a drop in international fuel prices will entail a reduction in domestic prices.

Net-net, the rail budget is an excellent effort from Bansal; especially given the extenuating circumstances and the temptation of playing electoral politics.

If the government (and the Congress party) approach Budget 2013 in a similar way—and the finance minister’s actions and words over the past month give us no reason to believe it won’t—we could well see a progressive and reform-minded budget being presented on Thursday.

Railway budget links freight rates to fuel prices

In his railway budget speech, railway minister P.K. Bansal keeps passenger fares unchanged

Raginiverma :Amenmalik :Feb 26 2013

 Railway minister P.K. Bansal proposed that freight rates be linked to fuel prices in the railway budget that he unveiled in Parliament on Tuesday while keeping passenger fares unchanged.

The budget proposal will mean that freight rates change each time diesel and power prices are revised. This comes a year after former railway minister Dinesh Trivedi proposed a fuel-adjusted component in the formula for determining freight prices.

Against the backdrop of elections and slowing economic growth, “the minister has not presented a very pessimistic scenario,” said Rajeev Jyoti, chief executive of Larsen and Toubro Ltd’s railway business. “The bottom line to me is that he has presented a budget which looks optimistic. Yet he recognizes the challenges that the railways is facing at the moment.”

The minister is trying to to target freight to generate funds and linking the diesel price is an indication of that, he said. “He is unlikely to rationalize the passenger fares any further in near future. We do not expect that,” Jyoti said.

Bansal said that the proposal to set up an independent tariff regulatory authority, also proposed by Trivedi last year, will be taken up by an inter-ministerial panel.

“The minister is trying to cover a lot of areas. We are very happy about the financial discipline and financial stability that the minister has talked about. But we will have to wait and see how the whole thing comes up,” said Naresh Agarwal, chairman of the Confederation of Indian Industry (CII) railway equipment division and managing director of VAE VKN Industries Pvt. Ltd.

The minister held back from any increase in basic passenger fares over and above that was effected on 22 January. He, however, proposed increasing service charges applicable on passenger ticketing, prompting protests from some members of the house. Bansal said that railways will raise Rs.483 crore from the revision in various service charges.

The railways has managed to significantly improve its operating ratio to 88.8% in 2012-13 from 95% a year earlier. For the next fiscal, Bansal has targeted a further improvement to 87.5%.

Although the railways will miss this year’s revenue targets both from the freight and passenger segments, Bansal said he has budgeted for Rs.93,400 crore by way of freight earnings and Rs.42,200 crore from passenger ticket sales. This year the railways is expected to earn nearly Rs.86,000 crore from freight andRs.32,500 crore from the passenger segment.

Bansal has budgeted for an annual plan outlay of a little over Rs.63,300 crore in 2013-14, out of whichRs.26,000 crore will come from the finance ministry as gross budgetary support. Bansal has proposed to raise around Rs.15,000 crore from the market and around Rs.14,200 crore from internal accruals.

The minister also proposed to set up a new debt service fund to repay loans and interest owed to funding institutions such as the World Bank and the Japan International Cooperation Agency, for whichRs.4,163 crore has been allocated in the coming fiscal.

“Creating the debt service fund is very important,” L&T’s Jyoti said. “He is in favour of having funds that will enhance the overall health of the railways.”

The railways has budgeted a relatively healthy Rs.7,200 crore towards the depreciation reserve fund, which is used for maintaining rolling stock. A little more than Rs.5,400 crore has been allocated to the capital fund, while Rs.22,000 crore has been allocated to the transporters’ pension fund. The development fund gets Rs.3,500 crore.

Bansal estimated that total gross traffic receipts in the coming year will stand at Rs.14,3742 crore.

A lament for Indian railways

Sundeepkhanna:Feb 26,2013:3.04pm

India’s 160-year-old rail network needs a bold leap forward, not an accountant’s budget

The piecemeal changes announced by railway minister Pawan Bansal in the Railway Budget are symptomatic of the scurviness with which successive governments have treated this vital piece of transportation. Indeed, if you ever need to see the much-flogged difference between India and Bharat you don’t need to travel to a remote Indian district. It is visible in the heart of any of our major metros staring at you in the form of the contrast between the swank roads leading up to the gold-plated Indira Gandhi international airport in the capital as opposed to the grubby, congested and underwhelming mess that leads up to the Old Delhi station.

The new airports in Delhi and Mumbai were built in record time to accommodate the anticipated increase in the number of fliers. The Old Delhi station built in 1903 on the other hand hasn’t undergone any major expansion in the intervening years. There is clearly a perverted snobbery in this step-motherly treatment of the railways.

Instead of putting the railways on the backburner with minimal additional investments in enhancing the quality and the span of its network, we need to celebrate its utility in the Indian context. The railways changed the way we live. The coming of the railways didn’t just put wheels on people’s feet. When you think of the vastness of the India of the 19th century, the railways meant that ideas and knowledge could grow from local to national.

Beginning its journey in 1853, the railway network reaches over 7,500 stations, carrying nearly 25 million passengers daily (over 900 crore on an annual basis). By contrast, all the airlines together flew 5.88 crore passengers last year, down from 6.06 crore in the previous year.

Of course the railways lose money – Rs 24,000 crore in fact, as the minister reminded us in his speech. But to put that in perspective, almost all of India’s airlines are deep in the red with accumulated losses over the last five years of more than $6 billion. Kingfisher alone has losses of nearly Rs 2,159 crore for the last nine months.

And yet, while the airline sector is a priority, and policies are being constantly tweaked to ensure choices and comfort for fliers, the rail passenger is a pariah. Just travel on any of the long-distance ordinary trains where people are herded like cattle in unsanitary compartments to fathom the full nightmare of the rail passenger.

Once upon a time, the very architecture of the railways, meant to bridge distant destinations, also ended up reducing the strangeness of places thousands of miles apart. Milan’s gigantic Stazione Centrale doesn’t seem particularly alien to a first-timer from India who has done a few trips to the very similar Chhatrapati Shivaji Terminus in Mumbai. Yet, in terms of ease, comfort, speed and charm of travel, the two rail networks are now light years apart. It is another enviable legacy we have squandered with impunity.

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Go Ahead and Forge Ahead Wizard..

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You are Always a Winner da.

Pantaloon: growth back, but will it sustain?

Pantaloon’s same store sales (SSS) growth for its lifestyle retail segment increased by 12.7%, the strongest SSS growth in the last six quarters. Photo: Ramesh Pathania/Mint

Live Mint :Pallavi Pengonda  : Tue, Feb 26 2013. 10 13 AM IST
Pantaloon’s sequential growth proves consumer sentiment is back, 
but sustainability remains to be seen

The financial results of Shoppers Stop Ltd and Titan Industries Ltdfor the December quarter (including the festival season) proved that consumer sentiment has improved during the quarter. The latest to confirm that trend is Pantaloon Retail (India) Ltd, which announced its December quarter results after market hours on Monday.

The company had maintained in its September quarter investors’ update that in 2012 the full impact of the festive season sales will be captured in the December quarter. Pantaloon’s core retail business sales numbers reflect the positive seasonality impact. Here’s the icing on the cake: the company’s same store sales (SSS) growth for its lifestyle retail segment increased by 12.7%, the strongest SSS growth in the last six quarters.

SSS growth measures growth based on stores open for at least a year. This variable becomes important because investors are aware that retail companies have been battling weak SSS growth for a while now. In the December quarter, Titan too saw an improvement in its jewellery business volumes and evenShoppers Stop saw an increase in its like-to-like sales volumes. Even as the home segment SSS growth continues to languish, what’s heartening in Pantaloon’s case is that the value retail segment performed well. SSS value growth increased by 5.1%, again the best in the last six quarters.

While that gives confidence, it remains to be seen whether the good cheer has continued beyond the festive season. That’s why the current quarter becomes all the more significant to judge whether the improvement in consumer sentiment is a sustained one.

On an overall basis, Pantaloon’s core business total operating revenue increased by about 10% on a year-on-year basis to Rs.3,178 crore. In comparison, September quarter revenue growth stood at 5%. However, profitability remained weak on a year-on-year basis. For instance, its profit before tax fell to Rs.7 crore from Rs.19 crore from the same period last year. Of course, sequentially the company performed well but then as mentioned earlier, the December quarter had the positive impact of the festival season. Additionally, interest costs were sequentially lower and flattish on a year-on-year basis, boosting overall profitability.

In the last one year, the Pantaloon stock has outperformed the BSE 200 index of the Bombay Stock Exchange, mainly because of the foreign direct investment news flow. Going forward, the sustainability of the SSS growth momentum is what will matter most for the stock