Sell Avenue Supermarts, target price Rs 2700: HDFC Securities
Avenue Supermarts Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 257717.16 Crore) operating in Retail sector.
By ETMarkets.com | Updated:
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HDFC Securities has sell call on Avenue Supermarts with a target price of Rs 2700. The current market price of Avenue Supermarts is Rs 3974. Time period given by analyst is one year when Avenue Supermarts Ltd. price can reach defined target.
Avenue Supermarts Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 257717.16 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-2021.
Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 10067.21 Crore, up 14.15 % from last quarter Total Income of Rs 8819.02 Crore and up 93.06 % from last year same quarter Total Income of Rs 5214.58 Crore. Company reported net profit after tax of Rs 642.89 Crore in latest quarter.
Investment Rationale
D-MART’s unit economics, while catching up, remains below pre-pandemic levels. Q1 print was broadly in line. Revenue grew 19.3% CAGR to INR98bn in Q1 (up 95% YoY). The revenue make-up continues to improve (normalising GM and apparel sales). However, the category sales remain below pre-pandemic levels. EBITDAM clocked a healthy 10.3% (at Q1FY19 levels; HSIE: 9.9%), led by (1) smartly managed product margins and (2) marginally lower-than expected cost of retailing. Accounting for higher AoVs, the brokerage suspects bill cuts/store remain lower than Q1FY19 levels. It maintains SELL rating, with a revised DCF-based TP of INR2,700/sh (earlier INR2,500/sh), implying 33x FY24E for the standalone business + 4x FY24E sales for DMART Ready. Note: FY23/24 EPS revised by +3/2% respectively.
Promoter/FII Holdings
Promoters held 74.99 per cent stake in the company as of 31-Mar-2022, while FIIs owned 8.83 per cent, DIIs 6.77 per cent.
Avenue Supermarts Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 257717.16 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-2021.
Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 10067.21 Crore, up 14.15 % from last quarter Total Income of Rs 8819.02 Crore and up 93.06 % from last year same quarter Total Income of Rs 5214.58 Crore. Company reported net profit after tax of Rs 642.89 Crore in latest quarter.
Investment Rationale
D-MART’s unit economics, while catching up, remains below pre-pandemic levels. Q1 print was broadly in line. Revenue grew 19.3% CAGR to INR98bn in Q1 (up 95% YoY). The revenue make-up continues to improve (normalising GM and apparel sales). However, the category sales remain below pre-pandemic levels. EBITDAM clocked a healthy 10.3% (at Q1FY19 levels; HSIE: 9.9%), led by (1) smartly managed product margins and (2) marginally lower-than expected cost of retailing. Accounting for higher AoVs, the brokerage suspects bill cuts/store remain lower than Q1FY19 levels. It maintains SELL rating, with a revised DCF-based TP of INR2,700/sh (earlier INR2,500/sh), implying 33x FY24E for the standalone business + 4x FY24E sales for DMART Ready. Note: FY23/24 EPS revised by +3/2% respectively.
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Promoter/FII Holdings
Promoters held 74.99 per cent stake in the company as of 31-Mar-2022, while FIIs owned 8.83 per cent, DIIs 6.77 per cent.
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