RESULT UPDATE SHOPPERS STOP -...

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Edelweiss Securities Limited

Shoppers Stop’s (SSL) Q2FY18 revenue belied estimate, while EBITDA came in line. Key highlights: i) 5.5% YoY LTL sales decline in departmental stores (2.2% YoY growth in base); ii) EBITDA jumped 100bps YoY due to shorter sales period in Q2FY18; and iii) robust pickup in demand in October (8-9% LTL SSSG). Q2FY18 was primarily impacted by GST implementation as supply was hit in July for 15-18 days. We are enthused by SSL’s initiatives to enhance presence in omni-channels and pare debt via: a) 5% stake sale to Amazon India; and b) sale of 51% stake in Hypercity to Future Retail (FRL). This, we believe, will help SSL focus on its core departmental store portfolio (9% SSSG in FY19E) and expand its omni-channel play. SSL remains one of our top picks in the retail space. Maintain ‘BUY’.

Advanced end-of-season sales and GST take a toll SSL’s LTL sales fell 5.5% YoY due to advancement of end-of-season sales to Q1FY18. July was weak as supply was impacted for 15-18 days across categories and formats

due to GST-related transition. The proportion of private labels slipped 150bps YoY to

10.7%. SSL has planned a complete revamp of private labels portfolio by positioning it

as a value brand and enhance the share of private labels to 18% by Q4FY18 and 20% in

FY19. HyperCity reported flat YoY LTL sales growth with LTL volume falling 5.5% YoY.

Q2FY18 conference call: Key takeaways The company is targeting 8% LTL sales growth in departmental in H2FY18 (our

estimate: 9% growth in FY18) and EBITDA margin of 6% in FY18. HyperCity’s debt is

expected to increase by INR220mn from July-December, which will reduce SSL’s cash

from FRL to INR680mn. Riding good demand, October clocked 8-9% YoY SSSG. As

fashion is taxed at 5% (under INR1,000) and 12% (above INR1,000), SSL is looking at

value offerings for its private labels so that merchandise will be taxed at 5%. LTL online

growth stood at 32% YoY.

Outlook and valuations: Headed in right direction; maintain ‘BUY’

We believe, SSL is in a sweet spot as: 1) tie up with Amazon will boost omni-channel;

and 2) funds raised via Amazon deal and HyperCity sale will be utilised to prune debt.

We maintain ‘BUY/SO’ with target price of INR692 (25% upside). At CMP, the stock is

trading at 14x FY19E EV/EBITDA.

RESULT UPDATE

SHOPPERS STOP Advanced sales season takes a toll; outlook sanguine

COMPANYNAME

EDELWEISS 4D RATINGS

Absolute Rating BUY

Rating Relative to Sector Outperform

Risk Rating Relative to Sector Low

Sector Relative to Market Underweight

MARKET DATA (R: SHOP.BO, B: SHOP IN)

CMP : INR 555

Target Price : INR 692

52-week range (INR) : 570 / 265

Share in issue (mn) : 83.5

M cap (INR bn/USD mn) : 46 / 715

Avg. Daily Vol.BSE/NSE(‘000) : 145.0

SHARE HOLDING PATTERN (%)

Current Q1FY18 Q4FY17

Promoters *

67.1 67.1 67.1

MF's, FI's & BK’s 13.4 13.4 13.4

FII's 4.3 4.3 4.2

Others 15.1 15.1 15.4

* Promoters pledged shares (% of share in issue)

: 8.47

PRICE PERFORMANCE (%)

Stock Nifty

EW Retail Index

1 month 19.1 6.0 7.8

3 months 57.8 3.0 7.4

12 months 48.5 19.8 23.3

Abneesh Roy +91 22 6620 3141

[email protected]

Rajiv Berlia +91 22 6623 3377

[email protected]

Alok Shah +91 22 6620 3040

[email protected]

India Equity Research| Retail

October 30, 2017

Financials (INR mn)

Year to March Q2FY18 Q2FY17 % change Q1FY18 % change FY17 FY18E FY19E

Revenues 8,376 9,544 (12.2) 9,411 (11.0) 49,101 54,875 49,988

EBITDA 507 479 5.7 301 68.4 1,743 2,812 4,007

Adj. Profit 120 107 12.1 (37) NA (655) 156 1,139

Adj. dil. EPS 1.4 1.3 12.1 (0.4) NA (7.9) 1.8 13.0

Diluted P/E (x) (70.7) 312.4 42.8

ROAE (%) (13.1) 2.7 16.0

https://www.edelresearch.com/showreportpdf-38270/SHOPPERS_STOP_-_COMPANY_UPDATE-SEP-17-EDEL

https://www.edelresearch.com/showreportpdf-38367/SHOPPERS_STOP_-_COMPANY_UPDATE-OCT-17-EDEL

https://www.edelresearch.com/showreportpdf-38367/SHOPPERS_STOP_-_COMPANY_UPDATE-OCT-17-EDEL

Retail

2 Edelweiss Securities Limited

Table 1: Trends at a glance

Source: Edelweiss research

Q2FY18 conference call: Key takeaways

Sales growth (departmental store)

Reported LTL sales decline of 5.5% YoY due to advancement of EOSS to Q1FY18

Sales season started 8-9 days ahead in June, which recorded INR1,000mn of sales which

if included in Q2FY18, would have seen 6% of LTL SSSG for the quarter

The company was adversely hit by GST both on supply and demand sides. July was

weak as supply was impacted for 15-18 days across categories and formats

July and Aug recorded double digit negative growth whereas September witnessed

double digit positive growth

North recorded double digit growth, whereas Mumbai and Bangalore were weak

The company foresees drastic improvement in demand going ahead and expects 8%

YoY SSSG in departmental stores for H2FY18

SSL witnessed good demand in Oct and during Diwali logged 8-9% YoY SSG

Post GST, many beauty products got shifted from the 12-18% pre GST to 28% now

Hypercity (Sales growth and EBITDA)

Excluding store related issues (one offs), the company reported flat LTL sales growth

The company posted 5% YoY LTL SSG in October

Hypercity handover will happen by end Q4FY18

HyperCity’s debt is expected to increase by INR220mn from July-December, which will

reduce SSL’s cash from FRL to INR680mn.

Private labels (departmental store)

Private labels sales mix fell by 1.5% YoY to 10.7%. SSL has planned complete reset of

private labels and take the share of private labels to 18% by Q4FY18 and 20% in FY19.

Management plans to complete the reset by Q4FY18

As fashion is taxed at 5% (under INR1,000) and 12% (above INR1,000), SSL is looking at

value offerings for their private labels so that merchandise can be taxed at 5%

Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18

Revenue 7,522 9,436 9,601 8,825 7,722 9,544 10,112 9,103 9,411 9,411

EBITDA 302 575 672 499 237 479 684 525 301 507

EBITDA margin (%) 4.0 6.1 7.0 5.7 3.1 5.0 6.8 5.8 3.2 6.0

SS deparment stores (LTL) 12.7 0.1 17.4 5.9 5.5 2.2 6.4 (1.1) 19.8 (5.5)

LTL volume growth departmental store 10.6 (1.6) 15.9 5.4 5.7 (3.1) 4.2 (3.3) 16.2 (10.4)

Customer entry (mn) 10 12 11 11 11 13 12 11 11 11

Conversion ratio (%) 22.8 25.8 26.7 27.1 23.9 26.6 26.4 27.4 26.8 27.9

Transaction size (INR) 2,860 2,681 2,869 2,725 2,818 2,667 3,128 2,920 3,041 2,832

Average selling price (INR) 1,215 1,011 1,308 1,118 1,179 1,070 1,336 1,143 1,222 1,122

Merchandise Buying Model (%)

Bought Out 44.2 41.6 42.9 42.9 45.1 40.5 40.4 38.1 39.6 37.9

Consignment/ SOR 53.9 56.6 55.2 55.2 53.2 57.9 58.1 60.4 59.0 61.1

Concession 1.9 1.8 1.8 1.8 1.7 1.5 1.5 1.5 1.4 1.0

Shoppers Stop


EBITDA margin (departmental store)

Margins increased due to shorter sales period versus last quarter

EBITDA margin guidance stood at 6% for FY18 and 8% EBITDA margin for departmental

stores over next 2 years

Store additions (departmental store)

There were no net addition of department stores – while SSL opened one, it shut one

3 MAC standalone stores were opened

The company plans to open 4-5 departmental stores every year and increase the

number of stores from 80 to 100 in next 3 years

In beauty segment, SSL plans to increase stores from 83 currently to 115 in next 3 years

Amazon tie-up

Currently, 40 SSL brands are live on Amazon and management expects it to increase to

250 brands by Q3FY18 and 400 brands by Q4FY18

The Amazon Experience centre is just a place to showcase Amazon products and there

will be no monetisation taking place from there. These stores will be functional only by

Q4FY18. SSL plans to capitalise on the footfalls coming to these Amazon Experience

stores.

Omni-channel

SSL saw 32% YoY growth in omni-channel

The company has invested INR600mn in 3 years and expects only INR100mn of

maintenance capex every year

Other key takeaways

First Citizen members club has crossed 5mn members. Their contribution to sales was

76% for the year

The company’s capex per sq ft is ~INR1,500-1,600

Savings from service tax reduction is 0.4% of sales

Retail


Outlook and valuations: Positive; maintain ‘BUY’

SSL is one of the best run retail companies and envisaged to reap benefits of its expansion

strategy. We expect SSS growth to be aided by normal monsoon and improvement in

discretionary spends led by implementation of OROP and Seventh Pay Commission coupled

with direct benefit transfers. The company has maintained momentum in its retail space

expansion even amidst slowdown, which will aid future growth (to open at least 3-4 SSL

departmental stores per annum). SSL’s omni channel strategy to counter online competition

is on track. Space rationalisation in HyperCity, higher fashion mix benefits and better

assortments will help bring back growth in HyperCity (to clock company-level EBITDA break-

even by Q4FY18).

Also, the government’s recent directive (press note 3) is aimed at curbing irrational

discounting by online players. Stress in many online players is a positive for physical

retailers. However, entry of single brand retailers such as H&M, Forever21 and heightening

competitive intensity on acquisition of Myntra by Flipkart will remain key monitorables.

In our view, SSL is well strategised to galvanise future growth as: 1) its investments in omni

channels will receive a boost post its tie up with Amazon India; and 2) funds raised through

preferential allotment to Amazon India and sale of HyperCity will be used to pare debt. We

maintain 17x FY19E EV/EBITDA to arrive at a target price of INR692. We maintain ‘BUY/SO’.

Shoppers Stop


Financial snapshot (INR mn) Year to March Q2FY18 Q2FY17 % change Q1FY18 % change YTD18 FY18E FY19E

Net revenues 8,376 9,544 (12.2) 9,411 (11.0) 17,787 54,875 49,988 Raw material costs 5,059 6,016 (15.9) 6,000 (15.7) 11,059 35,436 30,835

Employee expenses 720 680 5.8 720 0.1 1,440 4,116 3,749

Lease charges 903 883 2.3 874 3.3 1,778 4,664 4,249

Other expenses 1,187 1,486 (20.1) 1,516 (21.7) 2,703 7,847 7,148

Total expenditure 7,869 9,065 (13.2) 9,110 (13.6) 16,979 52,063 45,981

EBITDA 507 479 5.7 301 68.4 807 2,812 4,007

Depreciation 266 243 9.7 282 (5.7) 548 1,681 1,712

EBIT 240 237 1.6 19 1,182.6 259 1,130 2,296

Other income 61 76 (20.1) 54 13.3 114 250 150

Interest 106 143 (25.6) 134 (20.7) 240 900 800

Add: Prior period items

Add: Exceptional items (338) (338)

Profit before tax (143) 170 NA (62) NA (204) 480 1,646

Provision for taxes 75 63 19.4 (24) (407.9) 51 244 426

Minority interest

Associate profit share (80) (80)

Reported net profit (218) 107 NA (37) NA (255) 156 1,139

Adjusted Profit 120 107 12.1 (37) (422.3) 83 156 1,139

Diluted shares (mn) 84 84 84 84 88 88

Adjusted Diluted EPS 1.4 1.3 12.1 (0.4) (422.3) 1.0 1.8 13.0

Diluted P/E (x) - - - - 312.4 42.8

ROAE (%) - - - - 2.7 16.0

Purchases (% of revenue) 60.4 63.0 63.8 62.2 64.6 61.7

Employee cost 8.6 7.1 7.6 8.1 7.5 7.5

Lease charges 10.8 9.2 9.3 10.0 8.5 8.5

Other expenses as % of net revenues 14.2 15.6 16.1 15.2 14.3 14.3

EBITDA 6.0 5.0 3.2 4.5 5.1 8.0

Reported net profit 1.4 1.1 (0.4) 0.5 0.3 2.3

Retail


Company Description

SSL, part of the K Raheja Group of Companies, is a focused luxury segment department store

player. It has presence in high opportunity segments like home improvement through Home

Stop; infant and mothers to be care through Mothercare (a franchise with Mothercare PLC);

cosmetics and beauty care through M.A.C. and Clinique (a retail agreement with Estee

Lauder); the books and music space through Crossword; and in airport retailing through a JV

with Nuance from Switzerland. It also acquired majority stake in HyperCity, a hypermarket

venture promoted by a group company which focuses on mass segment of retailing.

Shopper’s Stop Ltd along with its associate companies HyperCity Retail (India) Ltd and

Timezone Entertainment Pvt. Ltd operates more than 5mn sq ft in the country. Investment Theme

The Indian retail landscape is evolving with interplay of several demographic and economic

factors. The big opportunity lies in the growing share of organised retail with the growing

trend among consumers to allocate a larger share of income to consumption and gradual

improvement in lifestyle. The improving liquidity is also positive as it means better delivery

of retail space for expansion. SSL is a niche play with strong brand position in the lifestyle

space. It has assiduously positioned itself as a retailer since 1991 of superior quality

products and services, offering an international shopping experience. This strong positioning

and brand recall gives the company a strategic advantage in the light of increasing

competition. With its steadfast focus on systems and processes and its ability to attract

global brands as venture partners, it is well placed to emerge as a leading departmental

store player in the long run.

Key Risks

Store rollout delays

A large number of retailers are facing delays in roll outs due to delays by developers. This is

a significant risk and can lead to cost overruns. Additionally, delays can also lead to capital

crunch with a large number of stores bunching up.

Increased competition

Pressure on margins due to cost escalation and competition

Escalation in lease rentals

Escalation in lease rentals and administration expenses can impact margins.


Shoppers Stop

Financial Statements

Income statement (INR mn)

Year to March FY16 FY17 FY18E FY19E

Net revenue 44,320 49,101 54,875 49,988

Materials costs 28,632 31,892 35,436 30,835

Gross profit 15,687 17,210 19,439 19,154

Employee costs 3,330 3,886 4,116 3,749

Electricity expenses 1,210 1,282 1,427 1,300

Rent and lease expenses 3,830 4,285 4,664 4,249

Other Expenses 4,381 4,833 5,158 4,699

Ad. & sales costs 1,146 1,181 1,262 1,150

Total operating expenses 13,897 15,467 16,627 15,147

EBITDA 1,791 1,743 2,812 4,007

Depreciation 1,297 1,510 1,681 1,712

EBIT 494 233 1,130 2,296

Add: Other income 259.72 250.63 250.00 150.00

Less: Interest Expense 848 874 900 800

Add: Exceptional items - (128) - -

Profit Before Tax (95) (518) 480 1,646

Less: Provision for Tax 334 203 244 426

Associate profit share 25 (63) (80) (80)

Reported Profit (403) (784) 156 1,139

Exceptional Items - (128) - -

Adjusted Profit (403) (655) 156 1,139

Shares o /s (mn) 83 83 88 88

Diluted shares o/s (mn) 83 83 88 88

Adjusted Diluted EPS (4.8) (7.9) 1.8 13.0

Dividend per share (DPS) 1.5 - 0.5 3.9

Dividend Payout Ratio(%) (31.1) - 30.0 30.0

Common size metrics


Rent and lease expenses 8.6 8.7 8.5 8.5

Materials costs 64.6 65.0 64.6 61.7

Staff costs 7.5 7.9 7.5 7.5

S G & A expenses 9.9 9.8 9.4 9.4

EBITDA margins 4.0 3.5 5.1 8.0

Net Profit margins (0.9) (1.3) 0.3 2.3

Growth ratios (%)


Revenues 3.4 10.8 11.8 (8.9)

EBITDA (33.2) (2.7) 61.3 42.5

Adjusted Profit (195.0) (62.7) 123.8 629.7

EPS (194.8) (62.7) 122.6 629.7

Key Assumptions


Macro

GDP(Y-o-Y %) 7.9 6.6 7.1 7.7

Inflation (Avg) 4.9 4.5 4.0 4.5

Repo rate (exit rate) 6.8 6.3 5.8 5.8

USD/INR (Avg) 65.5 67.1 66.0 66.0

Company

Revenue growth (Y-o-Y %)

SS-deptstore-Totalstores 77 80 85 90

SS depstore-New addition 5 4 5 5

SS - SSS growth (%) 8.5 3.1 9.0 9.0

HyperCity gross sales growth (%) 2.9 15.5 9.0 9.0

EBITDA margin (%)

Shoppers-COGS (% of rev) 64.2 64.8 64.3 64.6

HyperCity COGS as % of sales 76.0 73.7 80.0 74.0

Staff costs (% of rev) 7.1 7.5 7.5 7.5

A&P as % of sales 2.5 2.3 2.3 2.3

Electricity (% of rev) 2.6 2.5 2.6 2.6

Rent costs (% of rev) 8.2 8.3 8.5 8.5

Financial assumptions

Tax rate (%) 41.7 41.8 41.0 41.0

Capex (INR mn) (4,163) 621 2,273 1,930

Debtor days 6 4 4 4

Inventory days 64 62 62 62

Payable days 57 52 52 52

Dep. (% gross block) 18.6 20.3 10.2 10.2


Retail

Peer comparison valuation

Market cap EV / EBITDA (X) EV / Sales (X) ROAE (%)

Name (USD mn) FY18E FY19E FY18E FY19E FY18E FY19E

Shoppers Stop 715 20.2 14.0 1.0 1.1 2.7 16.0

Aditya Birla Fashion and Retail Ltd 1,769 22.6 15.9 1.8 1.6 14.9 25.1

Jubilant Foodworks 1,650 26.2 20.2 3.7 3.3 18.1 21.8

Titan Company 8,075 33.8 26.2 3.1 2.6 21.8 24.3

Wonderla Holidays 317 18.7 13.0 6.2 5.4 12.2 15.9

Median - 22.6 15.9 3.1 2.6 14.9 21.8

AVERAGE - 24.3 17.9 3.2 2.8 13.9 20.6

Source: Edelweiss research

Cash flow metrics


Operating cash flow 1,554 1,304 2,377 3,660

Investing cash flow (1,718) (1,498) (2,023) (1,780)

Financing cash flow 105 176 836 (1,920)

Net cash Flow (60) (18) 1,190 (39)

Capex 4,163 (621) (2,273) (1,930)

Dividend paid (125) - (47) (342)

Profitability and efficiency ratios


ROAE (%) (7.5) (13.1) 2.7 16.0

ROACE (%) 5.6 3.4 9.1 15.2

Inventory Days 64 62 62 62

Debtors Days 6 4 4 4

Payable Days 57 52 52 52

Cash Conversion Cycle 13 13 13 13

Current Ratio 1.6 1.7 1.8 1.9

Gross Debt/EBITDA 4.9 5.4 3.3 2.2

Gross Debt/Equity 1.7 1.9 1.4 1.2

Adjusted Debt/Equity 1.7 1.9 1.4 1.2

Interest Coverage Ratio 0.6 0.3 1.3 2.9

Operating ratios


Total Asset Turnover 3.3 3.5 3.6 3.1

Fixed Asset Turnover 4.9 5.3 5.9 5.2

Equity Turnover 8.3 9.8 9.5 7.0

Valuation parameters


Adj. Diluted EPS (INR) (4.8) (7.9) 1.8 13.0

Y-o-Y growth (%) (195.0) (62.7) 122.6 629.7

Adjusted Cash EPS (INR) 10.7 10.2 20.9 32.5

Diluted P/E (x) (115.1) (70.7) 312.4 42.8

P/B (x) 9.0 9.7 7.3 6.6

EV / Sales (x) 1.2 1.1 1.0 1.1

EV / EBITDA (x) 30.7 31.9 20.2 14.0

Dividend Yield (%) 0.3 - 0.1 0.7

Balance sheet (INR mn)

As on 31st March FY16 FY17 FY18E FY19E

Share capital 417 418 440 440

Reserves & Surplus 4,734 4,375 6,245 6,974

Shareholders' funds 5,151 4,792 6,685 7,414

Minority Interest (12) 52 52 52

Short term borrowings 4,214 5,618 5,618 5,618

Long term borrowings 4,581 3,710 3,710 3,000

Total Borrowings 8,795 9,327 9,327 8,618

Def. Tax Liability (net) (36) (43) (43) (43)

Sources of funds 13,898 14,129 16,021 16,041

Gross Block 8,220 8,766 10,266 11,766

Net Block 7,495 7,597 7,557 7,528

Capital work in progress 321 147 520 550

Intangible Assets 1,586 1,680 1,886 2,104

Total Fixed Assets 9,403 9,425 9,964 10,182

Non current investments 390 199 199 199

Cash and Equivalents 104 76 1,319 1,280

Inventories 5,792 5,776 6,361 5,620

Sundry Debtors 519 568 603 554

Loans & Advances 2,737 3,136 3,136 3,136

Other Current Assets 1,338 1,342 1,342 1,342

Current Assets (ex cash) 10,386 10,822 11,442 10,652

Trade payable 4,944 4,908 5,417 4,786

Other Current Liab 1,440 1,485 1,485 1,485

Total Current Liab 6,384 6,393 6,902 6,271

Net Curr Assets-ex cash 4,002 4,429 4,540 4,381

Uses of funds 13,898 14,129 16,021 16,041

BVPS (INR) 61.7 57.4 76.1 84.4

Free cash flow (INR mn)


Reported Profit (403) (784) 156 1,139

Add: Depreciation 1,297 1,510 1,681 1,712

Interest (Net of Tax) - - 603 536

Others 591 1,041 47 114

Less: Changes in WC (69) 463 111 (159)

Operating cash flow 1,554 1,304 2,377 3,660

Less: Capex (4,163) 621 2,273 1,930

Free Cash Flow 5,717 683 104 1,730


Shoppers Stop

Insider Trades

Reporting Data Acquired / Seller B/S Qty Traded

07 Apr 2017 Casa Maria Properties LLP Sell 2660000.00

07 Apr 2017 Cape Trading LLP Buy 4125361.00

07 Apr 2017 Raghukool Estate Development LLP Sell 2670000.00

07 Apr 2017 Capstan Trading LLP Sell 2670000.00

07 Apr 2017 Anbee Constructions LLP Buy 3874639.00

*in last one year

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

31 Mar 2017 Raghukool Estate Developement Llp Sell 2670000 360.00

31 Mar 2017 Casa Maria Properties Llp Sell 2660000 360.00

31 Mar 2017 Anbee Constructions Llp Buy 3874639 360.00

31 Mar 2017 Capstan Trading Llp Sell 2670000 360.00

31 Mar 2017 Cape Trading Llp Buy 4125361 360.00

*in last one year

Holding – Top10 Perc. Holding Perc. Holding

Palm shelter estate 14.15 Anbee construction p 12.44

Cape trading pvt ltd 12.44 Reliance capital tru 8.92

Raghukool estate dev 6.7 Capstan trading pvt 6.54

Casa maria propertie 6.29 Birla sun life asset 4.89

Icici prudential lif 4.45 K raheja corp pvt lt 4.05

*in last one year

Additional Data

Directors Data Chandru L. Raheja Chairman B. S. Nagesh Vice Chairman

Ravi C. Raheja Non Executive Director Neel C.Raheja Non Executive Director

Nitin J. Sanghavi Director Deepak Ghaisas Director

Nirvik Singh Director Gulu L. Mirchandani Director

Shahzaad Dalal Director

Auditors - Deloitte Haskins & Sells, Mumbai

*as per last annual report


Company Absolute

reco

Relative

reco

Relative

risk

Company Absolute

reco

Relative

reco

Relative

Risk

Aditya Birla Fashion and Retail Ltd BUY SO L Future Lifestyle Fashions Limited BUY SO L

Future Retail BUY SO H Jubilant Foodworks HOLD SP M

Shoppers Stop BUY SO L Titan Company BUY SO L

Wonderla Holidays BUY SP M

RATING & INTERPRETATION

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria

Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe

within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria

Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return


Shoppers Stop

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098.

Board: (91-22) 4009 4400, Email: [email protected]

Aditya Narain

Head of Research

[email protected]

Coverage group(s) of stocks by primary analyst(s): Retail

Aditya Birla Fashion and Retail Ltd, Future Lifestyle Fashions Limited, Future Retail, Jubilant Foodworks, Shoppers Stop, Titan Company, Wonderla Holidays

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe

Rating Distribution* 161 67 11 240 * 1stocks under review

Market Cap (INR) 156 62 11

Date Company Title Price (INR) Recos

Recent Research

27-Oct-17 Aditya Birla Fashion and

Retail

Early sale season, GST hit sales; recovery on cards; Result Update

149 Buy

26-Oct-17 Jubilant Foodworks

Sales inline; ongoing cost rationalisation paying off ; Result Update

1,643 Hold

06-Oct-17 Future Retail HyperCity buy: Bolstering consolidation; Company Update

528 Buy

> 50bn Between 10bn and 50 bn < 10bn

Buy Hold Reduce Total

Rating Interpretation

Buy appreciate more than 15% over a 12-month period

Hold appreciate up to 15% over a 12-month period

Reduce depreciate more than 5% over a 12-month period

Rating Expected to

-

149

297

446

594

743

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

De

c-1

4

(IN

R)

One year price chart

250

330

410

490

570

650

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

(IN

R)

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