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Motilal Oswal Report
Shoppers Stop Ltd.’s Q1 FY21 revenues tanked 93.5% YoY (40% miss) due to store closures.
However, better-than-expected cost control measures with 45% reduction in operating expense restricted Ebitda loss to Rs 1 billion (versus estimate Rs 1.1 billion and Rs 1.4 billion profit in Q1 FY20).
Despite outstanding cost rationalization, we have cut FY21 Ebitda by 37%, due to 10% revenue cut given the prolonged recovery expectation and lower gross margin.
We have cut FY22E Ebitda marginally by 4%, led by revenue cut.
Shoppers Stop has 72 departmental stores operational as on August 2020 with 70% lower footfall due to Covid-19 pandemic.
Demand should remain muted in Q2 FY21 while the festive season should lend support in Q3 FY21. Revenues are expected to remain flat or marginally increase YoY in Q4 FY21.
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