Neutral Shoppers Stop Target Price Slashed to Rs 370 by Motilal Oswal
Shoppers Stop Delivers Strong Departmental Store Performance in FY26
Shoppers Stop, India's leading retail company, has reported its strongest departmental store performance in a decade, with a FY26 like-for-like (LFL) growth of 4.7%. This growth is attributed to several factors, including premiumization, improved footfalls, and a healthy traction across non-apparel categories. The company's renovated stores have continued to post materially higher productivity, further contributing to its success.
Despite facing pressure on margins due to the high base created by one-off provision reversals in FY25, Shoppers Stop has shown resilience. Its FY26 pre-IND AS EBITDA stood at INR1.4 billion, with margins contracting by approximately 80 basis points (bp) year-over-year to 2.7%. However, the management has indicated that underlying operational margins have improved due to a better mix, lower discounting, and tighter cost-control initiatives.
Valuation and Outlook
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Motilal Oswal's research team values Shoppers Stop at 18 times FY28E pre-IND AS EBITDA, resulting in a revised target price of INR370. The team has reiterated its Neutral rating on the stock.
| Company | FY26 LFL Growth | FY26 Pre-IND AS EBITDA Margin |
|---|---|---|
| Shoppers Stop (SHOP) | 4.7% | 2.7% |
| -80bp YoY |
Note: The table compares Shoppers Stop's FY26 LFL growth and pre-IND AS EBITDA margin with its year-over-year (YoY) change.
Investor Takeaway
Investors should consider Shoppers Stop's revised target price of Rs 370 with a Neutral rating.
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