Shoppers Stop Q1 FY26 Results (NSE: SHOPERSTOP)
Signal: Loss narrowed
The read
Q1FY26 saw revenue growth (+11.2% YoY) but the company remains loss-making at the operating level; gross margins held steady at 39.4%, and cost control (employee costs +8.4% vs revenue +11.2%) narrowed the net loss to ₹14.25 Cr from ₹15.74 Cr YoY. The auditor's emphasis of matter on the ₹20.11 Cr contested service tax liability (standalone ₹16.60 Cr) remains an unresolved contingent liability.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,291.41 Cr | 11.2% | 6.7% |
| EBIT | ₹-19.03 Cr | 9.5% | |
| Net profit | ₹-14.25 Cr | 9.5% | |
| EPS | ₹-1.29 | 9.5% | |
| EBIT margin | 15.0% |
P&L walk
Revenue grew +11.2% YoY, driven by 11.2% increase in purchases; gross margin improved 10bps to 39.4% on stable input costs; employee costs grew 8.4% YoY (lagging revenue), while other expenses rose 6.7% — both showing cost control; depreciation and finance cost remained elevated at 10.7% and 5.7% of revenue respectively; the net loss narrowed to ₹14.25 Cr from ₹15.74 Cr YoY, driven by modest operating improvement but still loss-making at operating level.
Key positives
- Revenue grew +11.2% YoY to ₹1,291.41 Cr, the highest Q1 revenue in the prior results series.
- Gross margin expanded 10bps YoY to 39.4%, indicating stable input cost environment.
- Employee cost grew only 8.4% YoY, 280bps slower than revenue, showing cost discipline.
- Net loss narrowed to ₹14.25 Cr from ₹15.74 Cr YoY (improvement of 9.5%).
Key concerns
- Company remains loss-making at net level for 4th consecutive quarter, with operating loss of ₹19.03 Cr.
- Finance costs remain elevated at ₹73.77 Cr (5.7% of revenue), absorbing nearly all gross profit improvements.
- Depreciation at ₹138.03 Cr (10.7% of revenue) continues to weigh on profitability.
- Auditor notes ₹20.11 Cr contingent service tax liability (standalone ₹16.60 Cr) pending Supreme Court decision.
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