Buy Shoppers Stop; target of Rs 885: ICICI Securities

ICICI Securities is bullish on Shoppers Stop recommended buy rating on the stock with a target price of Rs 885 in its research report dated July 25, 2023.

Broker Research

July 26, 2023 / 11:25 IST

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ICICI Securities research report on Shoppers Stop

Shoppers Stop’s (SHOP) 1QFY24 was unimpressive. It is holding fort well when faced with industry growth headwinds (report link). That said, we expected SHOP’s private label (one of the key strategic pillar) to outperform the branded business (given ~30% lower ASP). Key positives in the result include: (1) relative outperformance in accessories (including beauty which continues to grow ahead of overall revenue) and (2) foray into value segment retail under a new brand Intune (at Zudio/Max equivalent price points). We reckon that revenue performance of SHOP has been one of the lowest in our retail coverage universe. It would be imperative for the company to fine-tune its branded business as well over and above driving growth in private label, beauty and the newly launched value format. We stay believers in Venu's leadership to drive stakeholder value. BUY.

Outlook

We have cut our EPS estimates by 17% in FY24E and 7% in FY25E. We model revenue, EBITDA and PAT CAGRs of 15%, 15% and 34% respectively, over FY23-FY25E. We maintain BUY rating with a DCF-based target price of INR 885 (vs previous TP of INR 850).

For all recommendations report, click here