Multibagger shares rally to post Q2 high. Brokers see more benefits

Shoppers Stop shares rose more than 3% to a record high of 819 apiece on BSE in Friday’s trading session after the company reported fiscal 23 second quarter results in line with estimates as January 2022 demand momentum continued into the second trimester.

Shoppers Stop chief executive Venu Nair, in an interview with Reuters, said its holiday season sales would surpass pre-covid levels on demand for gifts as well as second-hand and winter clothes from the wealthy of the country, after reporting a 60% increase in quarterly revenue. .

“We expect consumer sentiment to continue, particularly in the premium space, so we have modeled a revenue/EBITDA CAGR of 28%/51% FY22-25. set at +10% from pre-covid levels, highlighting the improvement in productivity The improvement in operational metrics from pre-covid levels illustrates the underlying strength of the business We continue to believe in the story of margin expansion, led by beauty and private labels,” brokerage PhillipCapital said with a “Buy” rating on Shoppers Stop stock with a target price of 965 each.

Shoppers Stop stock has yielded a multibagger return of over 139% over a one-year period, while the multibagger stock has risen around 145% in 2022 (YTD) so far. The company said its store expansion plan is on track and is expected to open 12 to 15 stores during the year, with 6 stores to be opened in October and November.

“Under the new leadership, the business is likely to improve its growth trajectory through accelerating expansion of smaller stores, growing private label mix and increased industry focus. growing beauty company, helped by improving consumer sentiment, in our view,” said ICICI Securities, which maintained an additional rating on the stock with a target price of 850 per share. However, he sees lower discretionary spending and execution challenges as key risks.

“Given the demand pull, we are increasing FY23/24E EBITDA by 11%/15%. We are maintaining the target price of 745 and hold ‘HOLD’. Other revaluation triggers are higher margins, either via an increase in SSSG and/or private label mix,” said another brokerage, Edelwiess.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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