Dalal Street Investment Journal

Book Partial Profits

Many were sceptical about the prospects of this company, particularly with concerns on the management quality front ringing loud. We, at Dalal Street Investment Journal, however, had chosen to look at the brighter side of the story and had recommended the stock when the company was getting listed on the bourses as a part of the restructuring of its parent company (Provogue). Its alliance with Capital Shopping Centres, the efficient management of debt and working capital and a favourable outlook on the retail real estate scenario was what had led us to believe in the good prospects of this company. Based on our calculations, we had estimated that the stock would get listed within a band of Rs 26-28, and it did list at a price of Rs 26 per share on September 12, 2012.

Since its listing, the share price of Prozone has appreciated by 36 per cent to touch Rs 35 per share. This is the result of a good response that the company’s mixed-use, retail-centric developments at Aurangabad, Maharashtra have elicited. The positive outlook on other projects in Tier II and Tier III cities is also what has helped the stock appreciate the way it did. Moreover, developments over multi-brand FDI in retail have been supportive of an improved outlook on the counter.

Conservative investors should book profits in the scrip. However, our positive outlook on the stock remains in place as we see the outlook on real estate and the retail sector improving further from here on. Investors with a higher risk appetite can hold on to the stock to seek better gains in the future.