Shoppers stop Q4 review – Green shots visible after recovery from Omicron: Motilal Oswal

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Adjusted for the one-time value, Shoppers Stop Ltd.’s Ebitda increased by 13.8% YoY, below our estimate, as the company lost ~ 15-20% revenue led by Omicron in January-February 2022.

However, green shoots are visible as March 2022 saw 40% annual growth, and April is witnessing double-digit growth relative to pre-Covid-19.

Shoppers Stops increased pace in store additions and increase in private labels are likely to revive growth. We have raised our FY23E / 24E Ebitda by ~ 5% each based on the expectation of better growth and modeled 28% revenue compounded annual growth rate over FY22-24 supported by revenue recovery and higher store supply.

However, the longevity of growth is uncertain as the lifestyle clothing category has reported subdued growth prospects.

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