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Motilal Oswal's research report on Shoppers Stop

Shoppers Stop (SHOP) reported in-line results, with muted 2% YoY revenue growth (vs. +8% YoY in 3Q) on a 3% LFL growth (4% YoY in 3Q). EBITDA rose 3% YoY, as ~380bp gross margin expansion was largely offset by higher costs and operating deleverage (other opex up 21% YoY). The company added a net of 15 stores during 4QFY25 across its formats, with INTUNE's presence rising to 71 stores in 30 cities. However, management has trimmed the guidance on INTUNE store additions for FY26 to 40-60 stores (vs. 90-100 store openings earlier). We believe the profitable scale-up of INTUNE remains the key trigger for SHOP. We cut our FY26-27 EBITDA estimates by 2-7% due to a slower ramp-up in INTUNE. We build in an FY25-27 revenue/EBITDA CAGR of 8%/10%.

Outlook

We value SHOP at 10.5x Mar’27E EV/EBITDA (implies ~30x FY27E pre-INDAS 116 EBITDA) to arrive at our TP of INR 500 (vs. INR600). Reiterate Neutral.

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Shoppers Stop - 01052025 - May

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