Shoppers Stop shares crash 13% after CEO quits; here's what technical analysts say

Shares of Shoppers Stop Ltd fell sharply on Friday after the departmental store operator said its chief executive Venugopal Nair resigned, citing personal reasons. The stock slumped 13.12 per cent to settle at Rs 705 over its previous close of Rs 811.45. At today's closing price, the scrip was down 20.76 per cent from its one-year high price of Rs 889.75, a level seen on August 9, 2023. Yet, the counter was up 22.64 per cent from its 52-week low price of Rs 574.85, hit on April 18 this year.

The company promoted chief commercial officer Kavindra Mishra as its new CEO and executive director. To ensure a seamless transition, Nair would continue to guide and advice the CEO over the next 6 months, in his capacity as a company official, Shopper Stop said.

It also mentioned that BS Nagesh, non-executive chairman, would handhold during the transition period. He will also mentor and coach the executive director and CEO, the departmental store operator added.

On technical setup, the stock largely looked weak for now, analysts said. Support on the counter could be seen at Rs 719, followed by Rs 700 level.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "The stock is currently nearing the 200-SMA (Simple moving average) on the daily charts, which historically has been seen as a strong supportive zone. The broader term view remains intact. On the levels front, immediate support is placed around 700-odd zone, followed by the previous consolidation zone of Rs 650. On the flip side, the primary hurdle is placed around the bearish gap of Rs 790-800 zone, breaching which the stock is expected to re-test 840-850 zone."

AR Ramachandran from Tips2trades said, "Due to resignation of the MD and CEO, Shoppers Stop's stock price has tumbled with next support at Rs 719 on the daily charts. Till daily resistance of Rs 771 is not broken on a closing basis, investors should avoid buying. Below Rs 719, next support will be at Rs 635."

Market expert Ravi Singh said, "The share price is volatile following the resignation of its CEO Nair who worked out the company during the pandemic and transition it into an omnichannel retailer. The stock may continue to fall to touch the levels of Rs 650 in near term."

The counter traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-day SMAs but higher than the 150-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 30.10. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 79.89 against a price-to-book (P/B) value of 38.37.

The scrip has an analyst target price of Rs 853, Trendlyne data showed, suggesting a potential upside of 18 per cent. It has a one-year beta of 0.40, indicating average low on the counter.

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