Shoppers Stop - Working towards making HyperCity profitable... - ICICIdirect

Shoppers Stop's (SSL) Q3FY13 results were a mixed bag with revenues exceeding our estimates and PAT coming in lower than our estimates. However, operating margin was in line with our estimates. SSL reported consolidated sales of Rs.893.8 crore, up 14.9% YoY. The operating margin was in line with our estimates at 4.4%. However, due to higher fixed costs, PAT at Rs.4.3 crore, was lower than our estimate.

During the quarter, the company added 0.05 million (mn) sq ft of space taking the total operational space to 4.83 mn sq ft. We have revised our earnings estimates on the back of an improved performance in the standalone segment. Having said this, we remain conservative on our valuation approach as the performance needs to be maintained or bettered from here on.

We maintain our HOLD rating on Shoppers Stop with a revised target price of Rs.435.

Source : Equity Bulls

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