The 24 reports from 9 analysts offering long term price targets for Avenue Supermarts Ltd. have an average target of 2113.88. The consensus estimate represents a downside of -7.70% from the last price of 2290.15.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-05-27||Avenue Supermarts Ltd.||ICICI Securities Limited||2200.20||2360.00||2200.20 (4.09%)||Target met||Hold|
ICICI Securities Limited
For FY20, revenue growth marginally tapered down to 24% YoY to | 24870.2 crore. Growth was mainly driven by aggressive store addition pace in FY20. DMart added record 38 stores (1.9 mn sq ft addition) taking total store count to 214 stores spread across 7.8 mn sq ft. The company continued to add larger stores with average sq ft of ~50000 (vs. average runrate 30000 sq ft.). Same store sales (SSSG) growth dipped to 10.9% vs. 17.8% in FY19. SSSG for matured stores (>five years) slowed down whereas new stores are peaking at faster clip (even before they qualify for 24 months SSSG calculations). EBITDA margins (adjusting for Ind-AS 116)...
|2020-05-25||Avenue Supermarts Ltd.||Motilal Oswal||2283.25||2403.00||2283.25 (0.30%)||Target met||Sell|
25 May 2020 10.9% SSSG and a strong 18 store additions drove 24% YoY revenue growth (in- line) in FY20. However, the company reported a big 22% miss on EBITDA with 4% YoY growth. We have cut our EBITDA estimate by 16.8% for FY21E due to 50% of stores being closed over AprMay20, lower gross margins from increased non- discretionary revenue, and higher opex. However, we maintained our FY22E EBITDA estimates given the sharp recovery expectation as it pertains to non- discretionary. DMARTs consolidated revenue grew 24% YoY to INR63b (down 8% QoQ, 4% above est.) on account of sales of only essential products at DMART stores. In Mar20, revenues grew only 11% YoY (v/s Mar19) due to the lockdown effect witnessed in the nine days of Mar20. Hence, implied revenue growth over JanFeb20 is ~30%. For FY20, revenue/EBITDA grew 24%/8.1% to INR249b/INR20.2b with flat EBITDA margin at 8.1%.
|2020-05-25||Avenue Supermarts Ltd.||IDBI Capital||2283.25||2076.00||2283.25 (0.30%)||-9.35||Hold|
Avenue Supermarts (DMART) reported better than expected result. Strong performance in the month of Jan'20 and Feb'20 was offset by moderate performance in Mar'20. Operating profit margins contracted due to higher discounting and revenue loss in high-margin-accretive GM and apparel business during lock-down in Mar'20. Absenteeism of staff due to COVID19 fear is a major cause of concern. DMART rolled out incentive (hardship allowance) and safety driven measure to win-back employees. Recovery in revenue during first 2 weeks of May'20 at +17% over Apr'20 (-45% YoY) is encouraging but significantly below normal levels. We believe, FY21E will be very...
|2020-05-24||Avenue Supermarts Ltd.||Prabhudas Lilladhar||2200.20||1658.00||2200.20 (4.09%)||27.60||Sell|
Stoppage of construction to impact store openings in FY21. We are cutting FY21 and FY22 EPS estimates of D'Mart by 16.8% and 8.1% due to 1) Lockdown impact on footfalls/sales 2) higher cost of operations 3) delay in store openings and safety cost. Although worst seems over given MOM improvement in May sales, expect near term margins to suffer due to...
|2020-04-18||Avenue Supermarts Ltd.||HDFC Securities||2212.10||21.00||2212.10 (3.53%)||99.08||Sell|
Extended lockdown drives estimates/TP downgrades for FY21/22E: Despite sharp correction in retail stocks, we see few value buys as for most, price performance is reflective of reduction in earnings power, esp. in apparel. (EBITDA cuts for FY21/FY22 range from -14 to 57%/-7-30% across universe). Subsequently TP cuts across universe range from -6 to -42%. We maintain our BUY rating on V-MART & ABFRL and SELL rating on D-MART. Impact of Covid-19 and FY21 template: Retail is likely to be among the worst hit sectors by COVID-19. Revenue declines across coverage is likely to range between 3-14% in 4Q. Impact on profitability (EBITDA) will be even higher (-14% to severe losses in FY21 ex-DMART) given the high fixed cost base in biz models. In this backdrop, Assessing 1. Foregone vs recoverable revenue, 2. Inventory fungibility/quality across seasons, 3. Capital to cover fixed costs and 4. Leverage position will assume centre stage.
|2020-04-13||Avenue Supermarts Ltd.||Motilal Oswal||2273.05||1750.00||2273.05 (0.75%)||23.59||Sell|
Accordingly, DMART should see 65-70% impact on its monthly revenue during the shutdown. Further, once the lockdown is lifted, the non-essential 30% product sales (which also include 10% apparel sales) may take some time to recover, as these are part of semi- discretionary products. The pace of store addition is also estimated to reduce from 28 to ~10 in FY21E. DMarts average cost of retailing is ~6-7% of stable state revenues, i.e. Thus, during the lockdown when sales impact is 65-70%, DMart could incur monthly EBITDA loss of ~INR400m, after factoring in 15-20% cost reduction due to opex savings from closed stores. Post lockdown, we expect swift revenue recovery given that 70% of DMarts business caters to the essentials category, against other apparel retailers, which may see severe impact. However, there could be some impact due to (a) 30% non-essential sales, and (b) lower new store addition in FY21.
|2020-04-08||Avenue Supermarts Ltd.||Geojit BNP Paribas||2392.65||2400.00||2392.65 (-4.28%)||Target met||Buy|
Geojit BNP Paribas
Avenue Supermarts Ltd (DMart) owns & operates India's most profitable supermarket, DMart. It provides products like Food (51%), Non-Food (FMCG-20%), General Merchandise & Apparel (29%) through 196 stores (total 6.97mn sq. ft as of Dec 2019). We believe the lockdown on account of COVID19 pandemic has impacted the industry through disruption in supply-chain, decline in footfalls and shortfall in workforce. However, the essential nature of products (51% is food category...
|2020-01-20||Avenue Supermarts Ltd.||Edelweiss||1948.60||1948.60 (17.53%)|
|2020-01-13||Avenue Supermarts Ltd.||IDBI Capital||1914.65||2223.00||1914.65 (19.61%)||Target met||Buy|
Avenue Supermarts (DMART) reported better than expected result led by continuance of strong retail expansion rate and better revenue mix. DMART continues its strategy of opening bigger size stores which presents more opportunity (i.e. more retail area) to retail high-margin general-merchandise and apparels where-in competition from leading online grocery retailers (like Grofers and Big Baskets) are conspicuously absent. This has aided in gross margin expansion despite discounting intensity rising to its peak. Ability to maintain gross margin through intelligent product-assortment strategy continues to justify the valuation-premium which DMART commands. We have...
|2020-01-13||Avenue Supermarts Ltd.||Geojit BNP Paribas||1990.55||2010.00||1990.55 (15.05%)||Target met||Hold|
Geojit BNP Paribas
Avenue Supermarts Ltd (DMart) owns & operates India's most profitable supermarket, DMart. It provides products like Food, Non-Food (FMCG), General Merchandise & Apparel through 196 stores (total 6.97mn sq. ft). Q3FY20 revenue grew by ~24%YoY and PAT grew by 53%YoY. Strong PAT growth was on account of reduction in corporate tax and improvement in margins. Gross margin expansion continued for the last 3 quarters (30bps in Q3FY20). DMart added 7 stores in Q2FY20, above expectation. Total 20 stores...
|2020-01-13||Avenue Supermarts Ltd.||Motilal Oswal||1914.65||1700.00||1914.65 (19.61%)||25.77||Sell|
13 January 2020 DMART delivered another strong quarter in a consumption slowdown context, albeit with an inline but a decelerating revenue growth print. High capex and moderating revenue growth could crimp return ratios and compress the stretched valuation multiples. DMARTs standalone 3QFY20 revenue/EBITDA/PAT grew 24%/26%/55% YoY to INR67.5b/INR5.7b/INR4b (pre IND-AS 116 basis). Footprint addition was a healthy 9% YoY in 3QFY20; the company added 7 stores/0.47m sqft to reach a total of 196 stores/6.97m sqft area. 9MFY20 saw addition of 20 stores (v/s est. Revenue growth came in at 24% each for 3QFY20/9MFY20, but has slowed considerably compared to 33% each in the corresponding period. For 9MFY20, our same store sales growth (SSSG) estimate was in low double- digit (v/s 18% in FY19). Gross profit was up 26% YoY at INR10.
|2020-01-12||Avenue Supermarts Ltd.||HDFC Securities||1914.65||1250.00||1914.65 (19.61%)||45.42||Sell|
We remain sellers on the counter as we believe 1) D-MART's throughput, cost and working capital efficiencies are near peak. 2) Cost of retailing is inching up. 3) Well capitalized e-grocers/online biggies (Amazon /Flipkart) are getting price-war-ready as can be seen from the significant bump up in their authorized capital. (This could increase cost of retailing in general for the industry over the medium to long term as offline retailers may be arm-twisted into taking fulfillment cost on their books not factored in). We largely maintain our estimates/TP and we bake Revenue/EBITDA/LTL APAT CAGR of 26/30/30% CAGR over FY19-22 and currently have a DCF-based TP of Rs. 1,250/sh, implying 24x Dec-21 EV/EBITDA. Stock currently trades at 42/34x FY21/F22 EV/EBITDA. While D-MART posted healthy growth in 3Q, the pace of growth has come off consistently over 9MFY20 courtesy 1. A heavier base, 2. Ever-heightening competitive intensity. What is more worrying is the dip in the anchor variable - sales velocity (revenue per sq. ft) over the last 9m partly due to larger-sized stores. This certainly warrants a closer look to assess how close is D-MART to its peak on throughput, cost and working capital efficiencies.
|2020-01-12||Avenue Supermarts Ltd.||HDFC Securities||1876.95||1876.95 (22.01%)||Sell|
Top-picks: V-MART (BUY), Avenue Supermart (SELL). 3Q was marred by multiple footfall dampeners - 1. Weak consumer sentiments, ergo weak volume off-take, 2. Socio-political protests (CAA & NRC-led), 3. Competitive intensity continued to heighten (especially across food & grocery and apparels).
|2019-10-17||Avenue Supermarts Ltd.||Geojit BNP Paribas||1925.60||1980.00||1925.60 (18.93%)||Target met||Hold|
Geojit BNP Paribas
Avenue Supermarts Ltd (DMart) owns & operates India's most profitable supermarket, DMart. It provides products like Food, Non-Food (FMCG), General Merchandise & Apparel through 189 stores (total 6.5mn sq. ft). We downgrade to HOLD due to limited upside and premium valuation....
|2019-10-14||Avenue Supermarts Ltd.||ICICI Securities Limited||1828.05||1700.00||1828.05 (25.28%)||Target met||Sell|
ICICI Securities Limited
The recent cut in corporate tax rate is a big positive for D-Mart as it was hitherto a full tax paying company. Incorporating the same, we revise our earnings estimates upwards by ~15%, thereby having a direct positive impact on cashflow generation. Despite a heavy capex nature of the business, D-Mart has a capital efficient business model generating superior RoCE of 23% and fixed asset turnover ratio of 4.1x. Optimal product assortment and stringent inventory management has led to robust inventory turns to the tune of 12.0x. D-Mart continues to trade on expensive...
|2019-10-14||Avenue Supermarts Ltd.||IDBI Capital||1828.05||1838.00||1828.05 (25.28%)||Target met||Accumulate|
Avenue Supermarts (DMART) reported below expected result on EBITDA and PAT front. This was largely due to higher than expected other expense and effective tax rate. Expansion in gross margin and healthy store addition rate were the key positives in the result. DMART is on track to achieve its FY20E aggressive guidance on store addition with no signs of slowdown. We expect DMART to add 27 stores in FY20E. Miss in EBITDA and PAT estimates is more of accounting-miss than structural. We continue to maintain our thesis on DMART as a secular play on value migration in India. Huge scope of penetration and superior business model should help DMART to win market share....
|2019-10-13||Avenue Supermarts Ltd.||Prabhudas Lilladhar||1843.20||1647.00||1843.20 (24.25%)||-28.08||Hold|
although sales and PAT missed our and street estimates. D'Mart growth strategy remains on track led by 1) steady pace of store openings with 13 stores added in 1H (added 21 stores in FY19 and average of 22 stores in past 4 years) 2) scaling up of D'Mart ready model from 58 locations in FY19 3) ramp up in young clusters like Punjab, Tamil Nadu, Rajasthan, NCR and MP and 4)...
|2019-09-13||Avenue Supermarts Ltd.||ICICI Securities Limited||1569.55||1450.00||1569.55 (45.91%)||36.69||Sell|
|2019-07-22||Avenue Supermarts Ltd.||Rudra Shares and Stock Brokers Ltd||1417.55||1700.00||1417.55 (61.56%)||Target met||Buy|
Rudra Shares and Stock Brokers Ltd
It has kicked off FY20 on an optimistic note by registering sturdy double-digit growth in its operating metrics led by store addition and improvement in gross margin. The profit grew 31.87 % to ` 323.06 crore and the revenue soared 27% to ` 5814.6 crore. EBITDA surged 39.17 % Y-o-Y to `607.71 crore with margin came in at 10.45 %, owing to better operational efficiency despite growing concerns over pricing pressure and competitive intensity. The Net Profit Margin is at 5.56%, higher than 5.35 % a year ago and ahead of...
|2019-07-16||Avenue Supermarts Ltd.||Geojit BNP Paribas||1463.60||1578.00||1463.60 (56.47%)||Target met||Buy|
Geojit BNP Paribas
Avenue Supermarts Ltd (DMart) owns & operates India's most profitable supermarket, DMart. It provides products like Food, Non-Food (FMCG), General Merchandise & Apparel through 184 stores (total 6.3mn sq. ft). DMart maintained a strong revenue growth of 27% YoY and EBITDA margin improved by 100bps YoY to 10.3% in Q1FY20. EBITDA margin surprised positively on account of an increase in gross margin by 50bps led by operational efficiencies. DMart added 8 stores in Q1FY19, largely a spill-over from the previous...