Neutral Shoppers Stop; target of Rs 190: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal 's research report on Shoppers Stop

Shoppers Stop's (SHOP) 1QFY21 revenues tanked 93.5% YoY (40% miss) due to store closures. However, better-than-expected cost control measures with 45% reduction in operating expense restricted EBITDA loss to INR1b (v/s est. INR1.1b and INR1.4b profit in 1QFY20). Despite outstanding cost rationalization, we have cut FY21 EBITDA by 37%, due to 10% revenue cut given the prolonged recovery expectation and lower gross margin. We have cut FY22E EBITDA marginally by 4%, led by revenue cut.

Outlook

We value SHOP on an SOTP basis and assign EV/EBITDA of 8x to standalone (SHOP) and EV/sales of 1x to Crossword on FY22E to arrive at a TP of INR190. Maintain Neutral.

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