Buy Shoppers Stop; target Rs 435: ICICIdirect.com

ICICIdirect.com's report on Shoppers Stop
 
"Shoppers Stop (SSL) believes that quality real estate will be difficult to acquire, going forward. Hence, it is continuing its expansion plan despite the grim economic situation. SSL has added ~17 departmental stores in FY12 and FY13, and plans to add about eight to nine stores each year for the next three years (YTDFY14 – six stores added already). On the HyperCity front, store addition is likely to be restricted to about two/year as the focus remains on first making the format profitable and then pressing the growth button. The management expects to add ~1.4 million sq ft over the next three years. The departmental stores are doing fairly well with stores in existence for more than a year operating at 7-8 percent EBITDA margins. As we have repeatedly said in the past, the turnaround of HyperCity remains the key monitorable. We maintain BUY on Shoppers Stop with a target of Rs 435."

"While it is business as usual for departmental stores, the losses of the HyperCity segment continue to dent the overall performance. The

management aims to achieve EBITDA and PAT level break even in FY14E and FY15E, respectively. Bearing in mind the long term prospects, we

maintain BUY rating on Shoppers Stop with a target price of Rs 435," says ICICIdirect.com research report.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More