scorecardresearchShoppers Stop hits new 52-week high after Q2 earnings; gained 144% so far in 2022

Shoppers Stop hits new 52-week high after Q2 earnings; gained 144% so far in 2022

Updated: 21 Oct 2022, 01:12 PM IST
TL;DR.
Shoppers Stop reported a 43% YoY rise in total revenue at 1,016.6 crore compared to 709.6 crore in the same period last year. The company’s EBITDA grew almost two-fold to 165.2 crore in Q2FY23 as against 72.3 crore in the corresponding quarter of last year.
Shares of Shoppers Stop have surged 143% so far in 2022. The stock gained 71.42% in the last six months to Rs. 804, from Rs. 469. The stock has more than doubled investors' wealth in the last year, increasing by 186.55%.

Shares of Shoppers Stop have surged 143% so far in 2022. The stock gained 71.42% in the last six months to Rs. 804, from Rs. 469. The stock has more than doubled investors' wealth in the last year, increasing by 186.55%.

Shares of Shoppers Stop surged nearly 6% in intraday trade on Friday after the company posted a consolidated net profit of 16.20 crore for the September ending quarter as against a net loss of 3.6 crore in the same quarter of the last fiscal.

In Friday's trade, the stock opened with a gap up of 24.9 at 799.70 and surged further to hit a new 52-week high of 820 but the stock failed to maintain this bullish direction and dropped to below 800 levels. At 12:30 p.m., the stock was trading at around 804, up by 3.77% on the BSE.

Shoppers Stop is a small-cap stock with a market capitalization of over 8,815 crore. The company is engaged in the business of retailing a variety of household and consumer products through departmental stores.

On October 20, Shoppers Stop reported a 43% YoY rise in total revenue at 1,016.6 crore compared to 709.6 crore in the same period last year. The company’s EBITDA grew almost two-fold to 165.2 crore in Q2FY23 as against 72.3 crore in the corresponding quarter of last year. Similarly, the EBITDA margin of the company increased by 45% year on year, from 11.26% to 16.32%, expanding by almost 506 bps.

The company posted a net loss of 132.8 crore in the March 2020 quarter due to the pandemic, and it posted a loss of 115.1 crore in the June quarter of 2020. The losses continued into the second quarter of 2022. But finally, it ended with a net profit of 50.2 crore in the third quarter of FY22.

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Stock price chart of Shoppers Stop

The retail sector, which was severely affected by the COVID-19 pandemic, has rebounded strongly as a result of the relaxation of the lockdown and the results of vaccination.

Retail spending is also being boosted by credit expansion, which hit a 10-year high of 16.2% in August as firms and consumers took out loans to fund investments and purchases. According to media reports, the total lending market in India stood at 174.3 lakh crore in FY22, with the retail segment accounting for 48.9% of it.

The retail industry is expecting strong sales in the ongoing festive period. According to a Reuters report, sales including both online and offline during the festive period are estimated to reach $27 billion, which is almost double the amount in the same pre-Covid period in 2019, and nearly 25% higher than last year.

Shares of Shoppers Stop have surged 143.33% so far in 2022. The stock gained 71.42% in the last six months to Rs. 804, from Rs. 469. The stock has more than doubled investors' wealth in the last year, increasing by 186.55%. The stock has risen 92% since June. The share price of this fashion retailer rose 197.72% from its 52-week low of Rs. 270.6.

Foreign investors increased their stake in the company to 6.4% in the first quarter of FY23, up from 5.8% in the previous fiscal quarter. Promoters owned 65.6% of the company, while regular shareholders held 7.6%.

An average of 10 analysts polled by MintGenie have a 'buy' call on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 21 Oct 2022, 12:50 PM IST