Motilal Oswal's research report on Shoppers Stop
Adjusted for the one-off, Shoppers Stop (SHOP)’s EBITDA increased 13.8% YoY, below our estimate, as the company lost ~15-20% revenue led by Omicron in Jan-Feb’22. However, green shoots are visible as Mar’22 saw 40% YoY growth and April is witnessing double-digit growth v/s pre-Covid. Heightened pace of store additions and ramp up in private labels are likely to revive growth. We have raised our FY23E/24E EBITDA by ~5% each, on expectation of better growth and modeled 28% revenue CAGR over FY 22-24 backed by revenue recovery and higher store additions.
However, the longevity of growth is uncertain as the lifestyle apparel category has reported muted growth outlook. We maintain our Neutral rating with a TP of INR510.
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