2289.20 -83.85 (-3.53%)
The 30 reports from 9 analysts offering long term price targets for Avenue Supermarts Ltd. have an average target of 2191.50. The consensus estimate represents a downside of -4.27% from the last price of 2289.20.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-10-21||Avenue Supermarts Ltd. +||Dolat Capital||2081.35||2063.00||2081.35 (9.99%)||Target met||Sell|
|2020-10-20||Avenue Supermarts Ltd. +||Geojit BNP Paribas||2116.55||2200.00||2116.55 (8.16%)||Target met||Hold|
|2020-10-19||Avenue Supermarts Ltd. +||HDFC Securities||2094.30||1850.00||2094.30 (9.31%)||19.19||Sell|
We maintain our FY22/23 EPS estimates and our Reduce recommendation with a DCF-based target price of Rs. 1,850/sh, implying 33.5x Sept-22 EV/EBITDA for standalone business + 2x sales for e-comm business). D-MART's 2Q revenue decline was a forgone conclusion, given its high exposure to some of the most impacted Indian districts. However, revenue recovery at 87.3% of the base quarter wasn't half as bad in our view. Margin delivery remains reasonable too in the context of "essentials-heavy" consumer wallets. However, non-essentials sales have been progressively recovering (73% base quarter sales). Steady cash flow generation YoY in the backdrop of 12/37% top-line/EBITDA cut YoY is commendable
|2020-10-18||Avenue Supermarts Ltd. +||Motilal Oswal||2094.30||2100.00||2094.30 (9.31%)||Target met||Neutral|
|2020-10-17||Avenue Supermarts Ltd. +||Prabhudas Lilladhar||2094.30||2316.00||2094.30 (9.31%)||Target met||Buy|
|2020-10-16||Avenue Supermarts Ltd. +||HDFC Securities||1984.20||1850.00||1984.20 (15.37%)||19.19||Sell|
While stocks have recovered from their Mar lows, one would be jumping the gun to call out a secular recovery just yet, especially in apparel. Upgrades: Avenue Supermarts (SELL to REDUCE), Downgrades: Titan (REDUCE to SELL), Trent (ADD to SELL) and V-MART (BUY to ADD). Recovery ratesa mixed bag: Revenue recovery in 2Q is expected to remain choppy as intermittent lockdowns play spoilt sport. While the Paints and Jewellery categories have nearly hit pre-COVID sales, apparel retail continues to struggle as footfalls remain elusive, with recovery rates ranging from 30-60%. Grocers, especially the online ones, continue to do well, as consumers prefer convenience over value. Losses across the board are ebbing. However, for apparel retailers, profitability improvement remains on crutches (rental concessions and salary cuts). In this backdrop, assessing (1) foregone vs recoverable revenue, (2) inventory position, (3) update on rental negotiations and (4) leverage position remain key.
|2020-08-05||Avenue Supermarts Ltd. +||Prabhudas Lilladhar||2131.95||2055.00||2131.95 (7.38%)||Target met||Hold|
from Hypermarts to Kirana and Ecom 2) slow pick-up in apparel and general merchandise 3) setback to Premiumisation as upper middle class cuts store visits 4) volatility due to localized lockdowns from time to time and 5) lower store openings in current year as Covid 19 has hit construction for 4 months. We assume addition of 20/40 stores in FY21/FY22 and decline of 6% in Bills/store/day and 4% in average bill value. D'Mart trades at 62xFY23 EPS. D'Mart is also experiencing with a convenience store in D'Mart Ready,...
|2020-08-05||Avenue Supermarts Ltd. +||ICICI Securities Limited||2163.45||2360.00||2163.45 (5.81%)||Target met||Hold|
ICICI Securities Limited
We attended the annual conference call on Avenue Supermarts (D-Mart) to get an insight into the outlook and challenges lying ahead owing to the Covid-19 pandemic. Majority of the questions (as anticipated) were pertaining to future plans regarding its e-commerce play (DMart Ready') and views on intensified competition from new entrants with deep pockets. The management reiterated its stance of not aggressively foraying into ecommerce play and rather focusing on further consolidating its position to be an eminent player in the brick & mortar format. Over the years, D-Mart, through its proven business model, has been able to maintain consistent...
|2020-08-05||Avenue Supermarts Ltd. +||Motilal Oswal||2150.55||2000.00||2150.55 (6.45%)||Target met||Sell|
5 August 2020 DMart has reopened most stores, and sales have reached ~80% across assortments as customer traffic is gradually returning to stores given the brands value offering. Same-store sales growth (SSSG) has fallen but is not concerning, excluding the high base of last year and select low-performing stores. Management indicated that in terms of store adds, it aims to make up for the lost period of lockdown with ~59 store additions over FY2122 (the next six quarters). B) It would focus on larger sized stores, predominantly in semi-urban and lower tier cities, that may have slightly sluggish metrics in the near term, but bring longer term growth, operating leverage, premiumization, and thus ROIC. However, it believes online is still restricted to the urban markets, where DMart Ready offers both delivery and pick-up options at more attractive pricing v/s online and would wait for the model to turn profitable.
|2020-07-14||Avenue Supermarts Ltd. +||HDFC Securities||2146.35||2146.35 (6.66%)||Sell|
Hence, footfall cuts are likely to remain steep, and higher AoVs will not be enough to make up for the footfall cuts. (2) Org. top-up formats have were already struggling even pre-COVID; the pandemic is likely to cause further stress on their cost of retailing and respective cash cover for fixed cost absorption. Meanwhile, e-grocers have been scaling up nicely in some of these catchments. The COVID-19 pandemic playing havoc in the high fixed cost retail sector is a foregone conclusion. More important is to assess which business model survives an extended version of the pandemic. This led us to assess multiple COGS of the proverbial retail flywheel: (1) store exposure to most impacted districts, (2) impact on GMs, cost of retailing and fixed cost cover, (3) fear-inflicted shifts in consumer behaviour and consequent habit formation and (4) selection and discounting trends. Note: We restrict our scope to the Food & Grocery (F&G;) space in this report. DMART's (RECO: SELL) footfall pain is likely to spill over in 2Q as well, as (1) its store exposure to most affected districts remains high (67% of stores).
|2020-07-13||Avenue Supermarts Ltd. +||HDFC Securities||2233.95||1800.00||2233.95 (2.47%)||21.37||Sell|
We largely maintain our FY21/22 EPS estimates and our SELL recommendation with a DCF-based TP of Rs. 1,800/sh (earlier Rs 1,750), implying ~36x FY22 EV/EBITDA. Note: TP change is a function of roll-over to Jun-21. D-MARTs high exposure to some of the most impacted districts of India is likely to keep both throughput and GMs/EBITDAM under pressure as essentials remain high in revenue mix until Sept-end. To add to the woes, DMART may also have to continue contending with rising cost of retailing, led by higher (1) hardship allowance to front line staff and (2) store sanitation costs.
|2020-07-13||Avenue Supermarts Ltd. +||Geojit BNP Paribas||1989.75||2100.00||1989.75 (15.05%)||Target met||Sell|
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 216 stores (total 8mn sq. ft). We downgrade DMart to Reduce rating with new Target of Rs2,100...
|2020-07-12||Avenue Supermarts Ltd. +||IDBI Capital||2322.70||2079.00||2322.70 (-1.44%)||Target met||Sell|
Avenue Supermarts (DMART) 1QFY21 result was operationally in-line while PAT was better than expected due to higher other income. Store shutdowns, restrictions on selling high-margin non-essential products and strict social distancing norms inside the stores contributed towards dismal performance in Q1FY21. Online sale remain strong as customers preferred safety and convenience. Adding 2 stores of size 1 lakh sqft each is departure from DMART's usual strategy of opening 40-50k sqft size stores. Large-size stores should ideally be more profitable if the company maintains its usual inventoryturnout of 14x.Given the strength of DMART's balance sheet with Rs 29bn unutilized money from QIP, it would be opportune time to bargain real-estate and further...
|2020-07-11||Avenue Supermarts Ltd. +||Motilal Oswal||2233.95||2000.00||2233.95 (2.47%)||Target met||Sell|
As a result, revenue witnessed a 34% drop and estimated same-store sales growth (SSSG) fell -55%; the closure of the margin-accretive non-food section dragged down gross margins by ~220 bps, translating to 81% YoY decline in EBITDA. DMarts consolidated revenues fell 33% YoY to INR39b (6% below est.) on sales of mostly essential products witnessed at DMart stores and many stores remaining shut in the initial phase of the nationwide lockdown. Gross profit fell 42% YoY (in-line) and gross margins (GM) contracted 220bps YoY to 14.2% (90bp below estimate). This is attributable to the high- margin General Merchandise and Apparel sections of retail stores being closed during the lockdown and stores in some areas (with high local restrictions) continuing to operate sales only for essentials items. Subsequently, loss of INR3b in gross profit directly impacted EBITDA, which fell 81% YoY to INR1.1b (28% below est.); EBITDA margins contracted 740bps to 2.
|2020-07-11||Avenue Supermarts Ltd. +||Prabhudas Lilladhar||1989.75||1695.00||1989.75 (15.05%)||25.96||Sell|
Store expansion plan suffers (just 2 added in 1QFY21), will impact FY22/23 D'Mart 1Q21 shows full impact of COVID19 with lower footfalls, higher cost of operations and restrictions on sale of non-essentials. However, being positive at EBIDTA and PAT level shows the resilience of business model with little rentals and interest cost. Although recovery of 80%+ of pre-Covid sale...
|2020-05-27||Avenue Supermarts Ltd. +||ICICI Securities Limited||2200.20||2360.00||2200.20 (4.05%)||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 (0.26%)||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 (0.26%)||Target met||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 (4.05%)||27.57||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 (3.49%)||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.