SHOPERSTOP - Shoppers Stop

📊 NSE: SHOPERSTOP 🏢 Textiles - Products 📅 Last Updated: 12/14/2025 13:15

💰 Financial Performance

Revenue Growth by Segment

The core department store business grew by 9% in Q2 FY26, while the Beauty distribution business (Global SS Beauty) reported a massive 130% growth in FY25, reaching INR 220 Cr. The value fashion segment 'INTUNE' is scaling rapidly, contributing to a 7% consolidated revenue growth in FY25 (INR 4,628 Cr).

Geographic Revenue Split

Not disclosed in available documents, though the company operates 112 department stores and 71 INTUNE stores across India as of March 31, 2025.

Profitability Margins

Gross margins for Q2 FY26 stood at 40.0%, a 20 bps decline YoY. Post Ind-AS operating margins contracted by 200 bps to 16.5% in FY25 due to higher fixed costs from INTUNE expansion and a decline in private brand contribution to 11% (from 12%).

EBITDA Margin

FY25 EBITDA was INR 751 Cr. For Q2 FY26, Non-GAAP EBITDA was INR 28 Cr, up 10% YoY. Management expects full-year core business EBITDA margins to be in the mid-single-digit range or slightly better as festive sales in Q3 drive operating leverage.

Capital Expenditure

The company invested heavily in new business endeavors, which led to a decline in PBT to INR 2 Cr in FY25 from INR 101 Cr in FY24. Specific planned INR Cr for future capex is not disclosed, but expansion includes 35-40 new INTUNE stores in FY26.

Credit Rating & Borrowing

The company maintains a healthy financial risk profile with pre-Ind AS interest coverage over 5x. Adjusted gearing (including lease liabilities) is high at 12.23 times as of March 31, 2025, up from 10.97 times YoY due to expansion funding.

⚙️ Operational Drivers

Raw Materials

As a retailer, the primary 'cost' is merchandise. 70% of revenue is derived from merchandise procured on a consignment, concessionaire, or sale-or-return (SOR) basis, which protects the company from inventory obsolescence.

Import Sources

Not disclosed in available documents; however, the company has exclusive distribution rights for international brands like Versace, Armani, and Prada, implying significant sourcing from Europe and global markets.

Key Suppliers

Not disclosed in available documents, but the company partners with international luxury groups for brands such as Michael Kors, Moschino, and Brunello Cucinelli.

Capacity Expansion

Current footprint includes 112 department stores and 71 INTUNE stores as of March 31, 2025. Planned expansion includes 35-40 additional INTUNE stores in FY26 and 9-10 new departmental stores in H2 FY26.

Raw Material Costs

Merchandise costs are managed through a 70% SOR/consignment model, ensuring gross margins remain stable around 40%. The shift toward private brands (11% of sales) is a strategy to improve margins, though it saw a slight decline in FY25.

Manufacturing Efficiency

Not applicable as a retailer; however, 'Department LFL' (Like-for-Like) growth was 9.4% in Q2 FY26, indicating high efficiency in existing store assets.

Logistics & Distribution

Not disclosed as a specific percentage of revenue, but the company uses process automation to optimize backend supply chain operations.

📈 Strategic Growth

Expected Growth Rate

6-7%

Growth Strategy

Growth will be driven by the 'Premiumization' strategy (increasing Average Transaction Value), the rapid rollout of the 'INTUNE' value fashion format (targeting 35-40 new stores), and scaling the Beauty distribution business which grew 130% in FY25.

Products & Services

Apparel, beauty products, luxury accessories, and personal shopper services.

Brand Portfolio

Shoppers Stop, INTUNE, SSBeauty, First Citizen (Loyalty Program), and exclusive distribution for Versace, Armani, Prada, Michael Kors, and Moschino.

New Products/Services

Launched 4 new international beauty brands and signed 10 more including Brunello Cucinelli and Versace. These are expected to deepen engagement in the high-margin aspirational beauty segment.

Market Expansion

Expanding into the value fashion segment via INTUNE and opening exclusive Armani and PRADA boutique stores to capture the luxury market.

Strategic Alliances

Exclusive distribution partnerships with international luxury brands through the subsidiary Global SS Beauty.

🌍 External Factors

Industry Trends

The industry is shifting toward premiumization and omnichannel retail. Shoppers Stop is positioning itself as a 'premium lifestyle destination' rather than just a department store to stay ahead of this curve.

Competitive Landscape

Facing increasing competition in the apparel retail segment, particularly from other value fashion and premium department store players.

Competitive Moat

The primary moat is the 'First Citizen' loyalty program (82% of sales) and the financial backing of the K Raheja Group. This provides a stable customer base and the financial flexibility to fund loss-making expansion phases in new formats like INTUNE.

Macro Economic Sensitivity

High sensitivity to inflation and interest rates; management noted urban consumers were cautious in Q2 FY26 due to inflationary concerns, impacting discretionary spending.

Consumer Behavior

Shift toward premium and wedding categories; customer entry grew 6% LFL in Q2 FY26, the first positive growth in many years.

Geopolitical Risks

Geopolitical uncertainties were cited as a factor for cautious urban consumer behavior in Q2 FY26.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with the Companies Act 2013 and SEBI Listing Obligations. The company follows Ind-AS 116 for lease accounting, which significantly impacts reported gearing (12.23x).

Environmental Compliance

Registered as a brand owner on the EPR portal of the Central Pollution Control Board for plastic waste management.

Taxation Policy Impact

The company had a tax provision credit of INR 5 Cr in FY25. GST amendments are viewed as a long-term growth enabler despite short-term implementation challenges.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ramp-up speed of new stores; if the 35-40 planned INTUNE stores do not reach break-even quickly, they will continue to drag down consolidated PBT (which was only INR 2 Cr in FY25).

Third Party Dependencies

High dependency on international brand partners for the Beauty distribution business, which is a key growth engine.

Technology Obsolescence Risk

The company is mitigating digital risks through investments in AI-powered analytics, video commerce, and hyper-personalization to drive omnichannel sales.