Sell Shoppers Stop; target of Rs 616: East India Securities

East India Securitie's report on Shoppers Stop

Private brands growth was -8% yoy at Rs 1450mn and they were at 12% of sales. Intune : Sale of Rs 160 mn in Q4FY24; YTD sales of Rs 360 mn. Intune mature stores are EBITDA positive. Conversion of SS clients to Intune clients is 33%. Beauty (excluding beauty distribution) grew by 7% yoy to Rs 2180 mn. Besuty distribution was Rs 340mn. Total beauty was at 18% of sales. Makeovers were 2,20,000. Beauty distribution sales were at Rs 420mn, YTD it is Rs 1,190mn. The business is EBITDA positive. Average Transaction Value (ATV), the amount spent by consumers per billing, was up up 8% yoy to Rs 4,581, down 9.33% qoq. Average selling price (ASP) was Rs 1,677, up 6% yoy. 7 Department, 12 INTUNE and 3 Beauty stores were added were added in the quarter. Added 5 new cities to take the total to 62. Investments in new stores was Rs 80mn, Quest mall launch was Rs 50mn and inventory write off was Rs 90mn.

Outlook

SS is currently trading at P/E of 35.8x on FY26 basis. We value the stock based on P/E methodology and assign multiple of 30x on FY26E PAT of Rs 2,248mn to arrive at a target price of Rs613 per share, which is a potential downside of 16.3% from current market price and recommend “Sell” on the stock.

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