ABOUT THE COMPANY
Shoppers Stop is a well known departmental store in India. A chain promoted by the K Raheja Corp Group (Chandru L Raheja Group), started in the year 1991. Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging Market Retailer of the Year Award". Shoppers Shoppers Stop has 34 stores in 15 cities in India.
ABOUT THE FINANCIALS
The company has posted fairly good resul;t for the third quarter of financial year 2010-11. The company has shown a 24% rise in gross revenue, it net profit rose by 45%. With a 30% rise in the number of footfalls, volumes have gone up 10%. Margins in third quarter had shown pressure mainly on account of the 30bps rise in VAT. Cyclically, Q2 and Q3 have always been the best while Q4 gets weaker.
NEWS FLASH
In the budget for 2011-12 a 10% excise duty has been proposed to be imposed on branded garments. This is expected to affect sales of such branded apparel shops as it will not any option but to hike the prices.
ABOUT THE STOCK & MY VIEW
The company along with other stores has opposed the imposition of excise duty on branded garment. If the excise duty is finally imposed , we would see some pressure in the margin and sales of the company in coming quarters. It would be better to wait for the ripe time to arrive for any fresh investment in retail sector.
