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ICICI Securities has maintained its 'HOLD' recommendation on Shoppers Stop, while increasing the stock's price target to ₹330 from ₹300. The retailer reported a 9.3% year-on-year increase in revenue for the fourth quarter of fiscal year 2026, with full-year comparable store sales growing by approximately 4.7%.
Despite this revenue momentum, ICICI Securities highlighted that Shoppers Stop continues to struggle in translating its sales into profits. The brokerage identified persistent operational inefficiencies as a primary reason for this challenge, noting the business's difficulty in consistently converting sales into meaningful bottom-line results.
In response, Shoppers Stop's management is pursuing a strategy focused on premiumization, aiming to attract higher-spending customers, and is scaling its 'Intune' brand. A key objective is to achieve a debt-free balance sheet by fiscal year 2027, which is expected to reduce interest expenses and strengthen the company's financial health.
Looking ahead to fiscal year 2027, ICICI Securities anticipates potential challenges that could impact earnings visibility. These include the possibility of inflation driven by crude oil prices, which may increase operational costs and affect consumer spending. Ongoing supply chain disruptions are also cited as a concern that could influence the company's financial performance.