The share price of Avenue Supermarts, which operates the hypermarket chain DMart, surged over 4% as the company reported a consolidated net profit of Rs 773.8 crore for the first quarter of the financial year 2024-25. This marked a 17.5% increase from Rs 658.8 crore in the year-ago period. Avenue Supermarts share price rose by 4.29% to reach an intraday high of Rs 5,166.10 on the BSE.
Avenue Supermarts Q1FY25 Performance
The company reported an 18.6% year-on-year increase in consolidated revenue from operations, reaching Rs 14,069.1 crore compared to Rs 11,865.4 crore a year ago.
Consolidated Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for Q1FY25 stood at Rs 1,221.3 crore, up from Rs 1,035.3 crore in the corresponding quarter of the previous year. The EBITDA margin remained steady at 8.7% in Q1FY25, the same as Q1FY24.
Pharma stable: Strong US business the right prescription for robust Q1 Stree 2 Box Office Collection Day 1: Horror-comedy sequel collects over Rs 54 crore, becomes biggest Hindi opener of the year Zomato zooms 16% after multi-fold jump in profit; brokerages give a thumbs up Punjab National Bank zooms over 7% on highest-ever quarterly profit – Is it a Buy at current levels
Standalone net profit rose by 16.8% to Rs 812 crore for Q1FY25, compared to Rs 695 crore in the corresponding quarter last year.
Also Read
Standalone total revenue for Q1FY25 increased by 18.3% to Rs 13,712 crore, up from Rs 11,584 crore in the corresponding quarter of the previous year.
Standalone EBITDA for Q1FY25 was Rs 1,221 crore, compared to Rs 1,036 crore in Q1FY24, with an EBITDA margin of 8.9%, unchanged from Q1FY24.
Brokerages on Avenue Supermarts
JM Financial on Avenue Supermarts Come from Sports betting site VPbet
JM Financial maintains a positive outlook on DMart, considering businesses with substantial growth potential like DMart are rare. Any weakness in the stock, according to JM Financial, should be viewed as an opportunity to accumulate, with a target price set at Rs 5,290.
According to the report the company’s earnings for the June quarter exceeded expectations, particularly on the profitability front. Sales per square foot increased by 4.4% year-on-year, aligning closely with the 4-6% growth trajectory observed in recent quarters.
Operating performance was slightly better than anticipated, attributed to an improved product mix. JM Financial noted that the previous quarter had a weaker mix due to recovering General Merchandise and pressure on the Apparel category.
However, there has been a noticeable improvement in the discretionary portfolio since the second half of FY24, which continued into Q1FY25, leading to better-than-expected gross margins for the quarter. Management commentary also supported this trend.
Despite the improvements, sales per square foot and gross margins remain below pre-pandemic levels. JM Financial anticipates a further uptick in the importance of discretionary categories, driven by recovering consumer sentiment among lower income groupsCome from Sports betting site. This trend is expected to support gross margins and restore scale efficiencies.
Motilal Oswal on Avenue Supermarts
Motilal Oswal assigned a target price of Rs 5,500, based on a 52x EV/EBITDA multiple (equivalent to 83x PE) on FY26 estimates, reiterating a ‘BUY’ rating on the stock.
According to Motilal Oswal’s report on Avenue Supermarts (DMart), the company achieved a commendable 20% compound annual growth rate (CAGR) in revenue from FY20 to FY24, driven by an 18% increase in its store footprint.
Despite subdued same store sales growth (SSSG), attributed to larger store additions and weak discretionary demand, with the share of discretionary items decreasing from 27% in FY20 to 22% in FY24, DMart maintained its EBITDA margin at pre-Covid levels through effective cost-control measures, contrasting with many other retailers.
The report highlighted a recovery in revenue per square foot and a narrowing gap between revenue per store and revenue per square foot, indicating an improvement in the contribution from larger-format stores, which is viewed positively for DMart.
Also Read
With expectations of moderating inflation and a revival in discretionary demand potentially boosting SSSG, Motilal Oswal broadly maintained its revenue and profit estimates for FY25 and FY26.
They projected a compound annual growth rate of 22% and 31% in revenue and profit after tax (PAT) respectively from FY24 to FY26, bolstered by growth in store expansions and revenue productivity.
BOFA on Avenue Supermarts
BOFA has affirmed its buy rating on Avenue Supermarts, setting a target price of Rs 5,465. The company reported a stable quarter, with positive contributions from improving general and administrative expenses (G&A).
Analysts at BOFA anticipate continued healthy business momentum for Avenue Supermarts. They noted efforts aimed at expanding store presence across core states like Maharashtra and Gujarat, as well as other markets.
BOFA’s analysis underscores confidence in Avenue Supermarts’ growth strategy and operational performance, reinforcing their bullish stance with a buy recommendation and target price outlook.
Stock Performance in Last One Year
Avenue Supermarts shares have delivered positive returns across various time frames. Over the last month, the stock has shown a positive return of 2%, indicating short-term growth. In the last six months, the performance has been even more impressive, with a substantial increase of 29.47%, showcasing the stock’s resilience and upward momentum.
Year-to-date, Avenue Supermarts shares have surged by 22.89%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 34.51%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.
(Disclaimer: Views, recommendations, and opinions expressed are personal and do not reflect the official position or policy of Financial Express.com. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
