Motilal Oswal Financial Services neutral on Avenue Supermarts; target price Rs 4050

Motilal Oswal Financial Services has neutral call on Avenue Supermarts with a target price of Rs 4050. The current market price of Avenue Supermarts is Rs 3690.

Avenue Supermarts, incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 250280.71 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 30-09-2022, the company has 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 has reported net profit after tax of Rs 685.71 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
Lower footfall and weak demand in the discretionary non-FMCG segment, along with a 20% increase in the store size, affected store productivity, which may take few quarters to recover. The brokerage estimates an EBITDA/PAT CAGR of 28%/26% over FY23E-25E. value the company at 50x EV/EBITDA on the FY24E basis.

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.