Axis Capital sees a lot of steam in Shoppers Stop shares, after the American e-commerce giant Amazon.com bought a 5% stake in the company. Axis Capital maintained a buy call on Shoppers Stop, and revised the target price to Rs 550, from the target price of Rs 450, an upward revision of more than 22%, as the research and brokerage firm believes that the 5% stake sale to Amazon.com will reduce debt by more than Rs 180 crore. Shoppers Stop shares surged by more than 15% on Monday morning and were trading at Rs 482.7. The shares have returned more than 44% in the year so far.
The partnership with e-commerce major Amazon would help Shoppers Stop tap customers from non-metro markets and scale up its financial performance, the domestic brand’s managing director Govind Shrikhande said yesterday, according to PTI reports. The US-based retailer Amazon through its arm is buying around 5 per cent stake in Shoppers Stop for Rs 179.26 crore as part of their partnership deal, which would allow Shoppers Stop access online market.
“If I am able to drive my online sales growth and brick & mortar sales growth at much higher pace, it will directly help financial numbers,” PTI reported Shoppers Stop Customer Care Associate & Managing Director Govind Shrikhande as saying. “We would collaborate and get our entire catalogue of products on Amazon.in, what it really mean that we are giving our power of assortment and catalogue to Amazon.in and in return we would actually get the massive reach of customers because they have a tremendous reach of multiple customers in multiple cities, while our presence is smaller cities tier II & III is very weak,” he added.
According to the joint statement issued by the firms yesterday, Amazon Experience Centers will be created across the network of 80 Shoppers Stop stores to bring in the touch and feel aspect on Amazon.in assortment. In FY2016-17, Shoppers Stop had a revenue of Rs 3,648.04 crore and had posted a net loss of Rs 19.94 crore.