2 SHOPERSTOP share price target reports by brokerages below. See what is analyst's view on SHOPERSTOP share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
The stock is priced at FY21E EV/EBITDA of 10x and P/E of 35x on pre IND-AS116 basis. Our SOTP-based valuation assigns 11x EV/EBITDA to Shoppers Stop stores and 1x EV/Sales to Crossword on FY21E basis to arrive at a price target of INR450. While the new strategies should accelerate revenue/EBITDA growth, the plateauing footfalls raise concerns over the branded retailer’s long-term sustainable growth. Subsequently, we maintain our Neutral stance.
Revenue growth for SSL continues to remain sluggish on the back of muted departmental store additions (net addition of three stores in FY17-19) and moderate SSSG (average SSSG of ~ 3% in FY17-19). The management has taken initiatives like revamping stores, changing product mix with higher emphasis on beauty segment and launch of new private label brands to increase customer interest. Sustainable enhancement in SSSG and increase in private label share would be critical for re-rating of the stock. We have a REDUCE recommendation on the stock with a revised target price of Rs 355 (7.0x EV/EBITDA).
Despite subdued topline growth in FY19, SSL reported a healthy performance at the profitability level, with EBITDA increasing 20% YoY to Rs 253 crore. The delta was mainly derived through gross margin expansion. Efforts towards strengthening the balance sheet have led to a reduction in total debt and significant decline in interest outflow (down 66% YoY to Rs 12.5 crore). Subsequently, RoCE improved 200 bps YoY to 11.6% in FY19. We roll our estimates to FY21E and expect revenue and EBITDA to grow at a CAGR of 11% and 14%, respectively, in FY19-21E. Sustainable enhancement in SSSG and increase in share of private label brands would be critical for re-rating of the stock. We maintain our HOLD recommendation on the stock with a revised target price of Rs 510 (13.5x FY21E EV/EBITDA).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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