ICICIDirect's research report on Shoppers StopShoppers Stop’s (SSL) consolidated Q3FY16 revenues grew 15.8% YoY at | 1358.7 crore (I-direct estimate | 1309 crore). Total operating space in Q3FY16 increased to 5.85 million square feet (mn sq ft) from 5.76 mn sq ft in Q3FY15 Like to like (LTL) sales growth for departmental stores declined QoQ from 0.1% in Q2FY16 to 17.4% in Q3FY16 (I-direct estimate: 14%) while LTL for HyperCity format was at -0.8% (I-direct estimate: 5%) The consolidated operating margin came in at 5% below our expectation of 5.5% while HyperCity reported an EBITDA loss of | 7.53 crore (I-direct estimate: loss of | 3.91 crore) Consolidated PAT was at | 11.4 crore (I-direct estimate: profit of | 18.2 crore) due to subdued operational performance of HyperCity We expect the margin improvement to gain momentum from FY17E onwards, which would be driven by space rationalisation and higher share of fashion in HyperCity. We maintain our BUY rating with a target price of | 490 (SOTP based – 0.9x (departmental format) and 0.8x (HyperCity format) FY18E EV/sales). For all recommendations, click here 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.
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