Hold Avenue Supermarts, target price Rs 4000: Axis Securities

Axis Securities has hold call on Avenue Supermarts with a target price of Rs 4000. The current market price of Avenue Supermarts is Rs 3678.65.

Avenue Supermarts, incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 238274.20 Crore) operating in Retail sector.

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


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 11600.61 Crore, up 8.68 % from last quarter Total Income of Rs 10673.90 Crore and up 25.50 % from last year same quarter Total Income of Rs 9243.72 Crore. Company has reported net profit after tax of Rs 589.64 Crore in latest quarter.

The company’s top management includes Mr.Ramesh Damani, Mr.Ignatius Navil Noronha, Mr.Ramakant Baheti, Mr.Elvin Machado, Mrs.Manjri Chandak, Mr.Chandrashekhar Bhave, Ms.Kalpana Unadkat. Company has S R B C & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 65 Crore shares outstanding.

Investment Rationale
The brokerage believes the company’s overall quality of sales and margin profile is likely to recover in FY24 as the company passes on the RM benefits through price reduction and increase grammage as well as due to the RBI’s intervention to curtail overall inflation which will lead to the overall improvement in throughput.

With a 4% downside from the CMP and the stock lacking a trigger for the upside, the brokerage maintains its HOLD rating on the stock.

Promoter/FII Holdings
Promoters held 74.99 per cent stake in the company as of 31-Dec-2022, while FIIs owned 8.59 per cent, DIIs 7.06 per cent.