ABMoney raises target price of Shoppers Stop to Rs 436

Brokerage house Aditya Birla Money has retained their "Neutral" rating on Shoppers Stop (SSL) and raised fair value of the company to Rs 436.7 per share from Rs 418 earlier. The research firm belives that Shopper's Stop is a quality play on organised retail story of India and post aggressive capex phase in last 2 years, business is ready to reap benefits with likely healthy growth in profitability over financial year 2013-2015 (FY13E-FY15E) period.

"Shoppers Stop (SSL), consumer sentiments is much better as compared to that of six months ago and we believe, going forward, it is likely to improve further, led by govt effort to drive the growth of Indian economy. Going forward, we expect SSS to be in the range of 7-8 percent. In addition, full ramp-up of stores opened during FY12-FY13 period will aid in healthy topline growth coupled with margin expansion during FY14E-FY16E period. We expect EBITDA margin to gradually expand to 5.7 percent and 6.2 percent in FY14E and FY15E respectively from 5.2 percent in FY13, said the AB Money note."

Also read: Consumers in no mood to splurge, says Shoppers Stop MD

"We believe SSL is the quality play on organised retail story of India and post aggressive capex phase in last 2 yrs, business is ready to reap benefits with likely healthy growth in profitability over FY13E-FY15E period. We have valued 51 percent stake in Hypercity on FY14E EV/sales multiple of 1.0x and all equity investments as on FY12 balance sheet on book value. Our May14 revised fair value per share comes to Rs 436.7 per share and we retain our "Neutral" rating," said the Aditya Birla Money note.

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