Mehabe score: 2 G Factor: 3 Piotski Score: 2 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 2.
Description
Shoppers Stop is engaged in the business of retailing a variety of household and consumer products through departmental stores.(Source : 202003-01 Annual Report Page No:121)Site:SHOPERSTOPMain Symbol:SHOPERSTOP
Stock trades at 246.0, above its 50dma 228.07. It also trades above its 200dma 214.13. The stock remains bullish on techicals
The 52 week high is at 270.15 and the 52week low is at 139.64
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 22.51 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -17.57% over past five years.
– has a low return on equity of -23.03% for last 3 years.
-Earnings include an other income of Rs.224.24 Cr.
Competition
– The industry trades at a mean P/E of 0.0x. Aditya Bir. Fas. trades at the industry’s max P/E of 0.0x. SHOPERSTOP trades at a P/E of x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 6.0. SHOPERSTOP has a G-Factor of 3 and Piotski scoreof 2.
– Average 1 month return for industry is 3.1%. The max 1- month return was given by Future Lifestyle: a return of 12.86 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 680.0 cr compared to Rs 724.0 cr for period ended Mar 2020, a fall of 6.1%
Operating Profits reported at Rs 95.0 cr for period ended Mar 2021 vis-vis 75.0 for period ended Mar 2020 .
Operating Margins expanded 361.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -2.2 compared to Rs -2.3 for previous quarter ended Dec 2020 and Rs -11.63 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1749.0 cr for period ended Mar 2021 vis-vis sales of Rs 3464.0 cr for the period ended Mar 2020, a fall of 98.1%. The 3 year sales cagr stood at -22.1%.
Operating margins shrank to 3.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, contraction of 1300.0 bps.
Net Profit reported at Rs -267.0 cr for period ended Mar 2021 vis-vis sales of Rs -142.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -287.0% compared to -23.0% over the last 3 Years. – The stock has given a return of 51% on a 1 Year basis vis-vis a return of -23% over the last 3 Years. – The compounded sales growth on a TTM bassis is -50% vis-vis a compounded sales growth of -22% over the last 3 Years. – The compounded profit growth on a TTM basis is -88% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 5.76% vis-vis 5.58% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 8.85% vis-vis 9.29% for Dec 2020
Conclusion
– – Stock is trading at 22.51 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -17.57% over past five years.
– has a low return on equity of -23.03% for last 3 years.
-Earnings include an other income of Rs.224.24 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 228.07 and is trading at 246.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
