Shoppers Stop share price rallies 12%, hits new 52-week high on Q1 profit; should you buy, sell or hold?

Shoppers Stop share price soared 11.7 per cent to hit a new 52-week high of Rs 605.15 apiece after the company posted a net profit of Rs 22.79 crore for April-June quarter

Shoppers Stop share price rallies 12%, hits new 52-week high on Q1 profit; should you buy, sell or hold?
Strong Q1FY23 earnings where both sequential and on-year performance has been better has led to a sharp uptrend in Shoppers Stop

Shoppers Stop share price soared 11.7 per cent to hit a new 52-week high of Rs 605.15 apiece after the company posted a net profit of Rs 22.79 crore for April-June quarter against the net loss of Rs 118 crore for the same period last year. The company has nearly tripled investors’ wealth in little less than one year, rising 168 per cent. Analysts believe that an increase in the footfall, improvement in consumer sentiments and revival of the retail segment has benefited the company’s earnings growth. 

Share price may touch Rs 650 – 700 level

Ravi Singh, VP & Head of Research, Share India Securities, told FinancialExpress.com that the upcoming festival season will further improve the demand in the retail segment. In the last one month Shoppers Stop stock price has risen 26 per cent, while on a year-to-date (YTD) basis, it has soared 80 per cent. “It can be expected that the revenue growth of Shoppers Stop will rise. On technical setup, the stock is bullish on major indicators. Hence, the counter has the potential to touch the levels of 650 – 700 in near term,” Singh said.

Investors can ride the current uptrend

Strong Q1FY23 earnings where both sequential and on-year performance has been better has led to a sharp uptrend in Shoppers Stop since the past 2 months, AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com. The stock has rallied 140.5 per cent in the last one year. “However, this has led to prices being overbought and hence investors should keep booking profits at current levels or upto levels of 625. Otherwise, investors can ride the current uptrend with a strong stoploss of 545 on a daily close basis,” Ramachandran advised investors.

Operational efficiencies, better sales, pvt label to aid margin growth

Research firm Motilal Oswal Financial Services has given a neutral rating to the stock. While Shoppers Stop remains B&K Securities’ top pick. The retail company’s overall performance came in much ahead of expectations, B&K Securities, said. It also added that Shoppers Stop is on track to deliver their long term growth levers of network expansion, digital transformation, enhanced focus on private labels and beauty segment. The research firm also remains optimistic on the company’s future prospects and expects it to achieve new heights under its new leadership. “Operational efficiencies and better sales/pvt label will aid margin growth in the medium-term. On the valuation front, although the stock has run-up by ~25% in the recent past, it still currently trades at inexpensive valuations of 10x/8x EV/EBITDA for FY23E/ FY24E, respectively,” it said.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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