Dear All,
Forwarding you the Result Update on Shoppers Stop for 4QFY2011 with a Neutral recommendation.
For 4QFY2011, Shoppers Stop (SSL) reported disappointing results on account of high losses in HyperCity. On a consolidated basis, the company’s top line grew by 60% yoy to `692cr backed by robust growth in same-store sales (SSS) and volume growth. EBITDA margin declined by 170bp yoy to 2.2% Consequently, PAT fell by 39% yoy to `8cr. We maintain our Neutral view on the stock.
Higher depreciation, interest cost and tax outgo hit profit: During the quarter, SSL reported 60% yoy growth in net sales to `692cr. However, OPM declined by 170bp yoy to 2.2% and EBITDA came in at `15cr. High interest cost and tax outgo resulted in PAT declining by 39% yoy during the quarter.
Outlook and valuation: We are bullish on the long-term growth prospects of the retail sector. Considering the revival in demand for lifestyle category goods, SSL’s store rollout plans and the continuing cost-rationalisation measures, we remain positive on the company’s growth prospects. At `354, the stock is trading at 27.0x FY2013E fully diluted earnings and 4.2x FY2013E P/BV. We maintain our Neutral view on the stock.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600 Ext: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,5th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600, Ext: 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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