D-Mart stock drops 3% despite 52% surge in Q4 profit

NEW DELHI: Shares of Avenue Supermarts, the owner of D-Mart chain of supermarkets, tumbled over 3 per cent in Monday’s trade even as the company announced a 51.6 per cent jump in net profit at Rs 483 crore in the fourth quarter.

Following the announcement, the stock dropped 3.15 per cent to hit a low of Rs 783.10 on BSE.

The company on Friday said that its total revenue for the quarter rose 38.6 per cent YoY at Rs 11912 crore.

“Valuations are on the higher, way on the higher side. The inventory turns that D-Mart does encapsulates its strong EBITDA margin performance and the square foot realisation is much better than any of the peers on the Street. I think better asset and inventory turns have insured that EBITDA margin stays at an elevated level,” said Mayuresh Joshi, Fund Manager at Angel Broking.

“Investors who were holding on to the stock should clearly hold on. But at the prevailing valuations, probably it looks a little bit difficult to fathom a fundamental view in terms of fresh investing,” Joshi said.