Motilal Oswal's research report on Shoppers Stop
Shoppers Stop (SHOP) revenue grew 6% YoY in 1QFY25 (vs. +8%/+2% YoY in 3Q/4Q), led by 5% LFL growth in Departmental format and ~2x growth in INTUNE. EBITDA rose sharply by 17% YoY. Margins expanded ~145bp YoY to 15.2%, largely due to tight control over costs (other expenses flat YoY). Store count remained flat YoY as four additions in INTUNE were offset by three closures in Beauty and one in Home Stop. Management indicated that customer footfalls improved in 1QFY26, aided by weddings and lower inflation. However, value retail is facing challenges, resulting in a reduction in INTUNE store addition guidance to 30-40 stores (vs. 40-60 earlier). We believe a profitable scale-up of INTUNE remains the key trigger for SHOP.
Outlook
We value SHOP at 10x Sep’27E EV/EBITDA (implies ~23x Sep’27E pre-INDAS 116 EBITDA) to arrive at our revised TP of INR510. Reiterate Neutral.
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