Shoppers Stop (SHOPERSTOP)

FairStock Score: 5/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding is high at 65.70%, indicating strong ownership alignment.
• Latest quarter turned a positive net profit of ₹16 Cr on sales of ₹1,416 Cr.
• Sales growth is positive at 2.64%, though modest.
• ROCE is positive at 7.96%, showing some operating return on capital employed.

Concerns

• Debt-to-equity of 11.56 is extremely high for a low-margin retailer, creating serious financial risk.
• ROE is negative at -8.97%, and P/B of 11.62 means the market is paying a huge premium to eroded book value.
• P/E is 0.00, profit growth is -41.41%, and dividend yield is zero, offering no investor return.
• Piotroski F-score of 4/9 and FairStock score of 0/100 highlight financial distress and risk.

AI Analysis

At first glance, Shoppers Stop fails my first test: it does not earn a return on equity. ROE is -8.97%, while book value is only ₹25.56 and the market is paying ₹296.95, or 11.62 times book. That is a dangerous combination. The trailing P/E of 0.00 confirms the company is not generating meaningful earnings for shareholders; profit growth has fallen 41.41%. In retail, a weak balance sheet can be fatal. Debt-to-equity at 11.56 is extremely high, and with zero dividend yield, shareholders are not being paid to wait. The Piotroski F-score of 4/9 and FairStock score of 0/100 reinforce my caution. There are some positives. Promoter holding is strong at 65.70%, which aligns owners and management. The latest quarter shows sales of ₹1,416 Cr and a net profit of ₹16 Cr, so it is not in a cash-burn crisis. ROCE is 7.96%, but with this leverage, that return is far too low to create value. Sales growth of 2.64% is pedestrian, hardly a sign of a compounding machine. Buffett said it is wonderful to buy a wonderful company at a fair price; this is not a wonderful company. It is a leveraged, low-margin retailer in a brutally competitive industry. The price has fallen from ₹572 to ₹297, and value investors often mistake a falling knife for a bargain. Without sustainable profitability and a repaired balance sheet, I cannot calculate an intrinsic value with any confidence. This shares more characteristics of a turnaround bet, not an investment of safety. I want to see several quarters of real profit, lower debt, and positive ROE before I would even consider it.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer