Shoppers Stop dips into red after touching 10-week high

Shoppers Stop shares witnessed a roller-coaster session on Wednesday, January 15, 2025. After surging as much as 11 per cent to touch a 10-week high of Rs 688.70 in intraday trade, the stock reversed gains to close in the red at Rs 618, down by 0.35 percent.

Intraday rally driven by strong Q3 results

The rally in early trade was fueled by the department store chain’s robust Q3FY25 performance, reported post-market hours on Tuesday. The company’s standalone net profit rose 37 per cent year-on-year to Rs 49 crore, while revenue from operations increased by 9 per cent YoY to Rs 1,311 crore. EBITDA came in at Rs 240 crore, reflecting a quarter-on-quarter margin expansion of 400 basis points to 18 per cent, although YoY margins remained flat.

The company’s beauty segment led the growth story, with fragrance sales soaring 14 per cent and overall beauty revenues touching Rs 268 crore, up 3 per cent YoY.

Additionally, sales from private labels contributed 12 per cent to total revenue, signalling a strategic shift towards higher-margin products.

CEO highlights resilience amid challenges

Kavindra Mishra, MD and CEO of Shoppers Stop acknowledged the challenging macroeconomic environment but remained optimistic. “We ended Q3 on a positive note with healthy volume-led revenue growth of 9 per cent despite inflationary pressures. Premium categories now account for 64 per cent of total revenue,” Mishra said. He also noted that initiatives like “India Weds with Shoppers Stop” and “Winter Magic Campaign” helped sustain demand.

Profit booking caps gains

Despite the strong fundamentals, profit booking wiped out intraday gains. At current levels, the stock is down 30 per cent from its all-time high of Rs 943, achieved in September 2024. Market experts attribute the reversal to cautious investor sentiment amid broader market volatility.

Analyst recommendation

Vikas Sethi of Sethi Finmart remains bullish on Shoppers Stop and has issued a ‘buy’ recommendation. “The stock has strong fundamentals and a target price of Rs 650, with a stop loss at Rs 610,” Sethi advised.

Store expansion and plans

Shoppers Stop opened sixteen new stores in Q3, including nine INTUNE and six SS Beauty stores, with plans to add thirty-two more outlets in Q4. The total capital expenditure for Q3 stood at Rs 53 crore, underscoring the company’s growth ambitions.

While the stock’s intraday high reflects investor confidence in the company’s Q3 performance, sustained profitability and strategic execution will be key to long-term gains.