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    Buy Shoppers Stop, target price Rs 275: ICICI Direct

    Synopsis

    Shoppers Stop Ltd., incorporated in the year 1997, is a Mid Cap company (having a market cap of Rs 2492.84 Crore) operating in Retail sector.

    Shoppers Stop storeETRetail
    Promoters held 63.9 per cent stake in the company as of June 30, 2020, while FIIs held 7.1 per cent, DIIs 20.4 per cent and public and others 8.6 per cent
    ICICI Direct has buy call on Shoppers Stop with a target price of Rs 275. The current market price of Shoppers Stop Ltd. is Rs 230.55. Time period given by analyst is one year when Shoppers Stop Ltd. price can reach defined target.
    Shoppers Stop Ltd., incorporated in the year 1997, is a Mid Cap company (having a market cap of Rs 2492.84 Crore) operating in Retail sector.

    Financials
    For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 704.70 Crore, down -5.59 % from last quarter Total Income of Rs 746.45 Crore and down -3.70 % from last year same quarter Total Income of Rs 731.76 Crore. Company reported net profit after tax of Rs -24.10 Crore in latest quarter.

    Investment Rationale
    For FY21, negative FCF was at ~Rs 320 crore. In a bid to strengthen the b/s, SSL had proposed a rights issue worth Rs 300 crore that was fully subscribed. The company’s liquidity position is fairly stable with cash & investments worth Rs 169 crore and debt worth Rs 150 (net surplus Rs 19 crore). Given near term headwinds, we revise our revenue estimates downwards by 18%, 2%, in FY22E, FY23E, respectively. The brokerage believes the new MD (former Westside CEO) would bring in his expertise in the private label brands domain and focus on enhancing the share of private labels. It expects RoCE to improve steadily to ~13% by FY23E. Enhancement of revenue share of private labels and consequent improvement in margin profile would be key triggers for a re-rating of the stock.

    Promoter/FII Holdings
    Promoters held 63.9 per cent stake in the company as of June 30, 2020, while FIIs held 7.1 per cent, DIIs 20.4 per cent and public and others 8.6 per cent

    (Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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