Buy Avenue Supermarts, target price Rs 5121: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Avenue Supermarts with a target price of Rs 5121. The current market price of Avenue Supermarts Ltd. is Rs 4174.1.

Avenue Supermarts Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 268136.62 Crore) operating in Retail sector.

Avenue Supermarts Ltd. key Products/Revenue Segments include Income from Retailing and Other Operating Revenue for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 10673.90 Crore, up 6.03 % from last quarter Total Income of Rs 10067.21 Crore and up 36.56 % from last year same quarter Total Income of Rs 7816.44 Crore. Company reported net profit after tax of Rs 685.71 Crore in latest quarter.

Investment Rationale
D’Mart remains top pick to play the shift from unorganized to organized market in food and grocery led by 1) consolidated industry with only 2/3 players having huge entry barriers 2) Significant scope to grow in existing catchments with potential of 1500 stores, as against having 302 stores currently 3) Focus on everyday low prices 4) Growing success of D’Mart ready with expectation to turn EBITDA positive by FY25 5) 42% PAT CAGR over FY22-25, as strong sales are expected post covid from new stores opened during covid 6) Margin accretion from rise in the share of general merchandise and apparel segment. ‘Buy’ with a DCF based target price of Rs5121.

Promoter/FII Holdings
Promoters held 74.99 per cent stake in the company as of 30-Jun-2022, while FIIs owned 8.59 per cent, DIIs 6.88 per cent.