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Last Updated : Jul 31, 2018 10:15 AM IST | Source: Moneycontrol.com

D-Mart operator, Avenue Supermarts, surges over 4% after stellar Q1 show; Jefferies hikes target price

The company reported a strong 43 percent rise in net profit for the March quarter at Rs 250.6 crore. The firm had reported Rs 174.8 crore profit during the same quarter of last year.

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Shares of Avenue Supermarts, the operator of D-Mart, rose over 4 percent on Tuesday morning as investors cheered the firm’s results for June quarter.

The stock touched an intraday high of Rs 1,663.80 and an intraday low of Rs 1,622.00.

The company reported a strong 43 percent rise in net profit for the March quarter at Rs 250.6 crore. The firm had reported Rs 174.8 crore profit during the same quarter of last year.

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Its revenues grew 27 percent at Rs 4,559.4 crore against Rs 3,598.1 crore, year on year.

At the operating level, the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) soared 39 percent to Rs 423 crore against Rs 303.1 crore in the previous year. The operating margin came in higher at 9.3 percent against 8.4 percent last year.

Analysts at several broking firms have largely been upbeat about the results, citing strong execution as well as lower interest cost effects.

Brokerage: JPMorgan | Rating: Underweight | Target: Raised to Rs 1,175

The global research firm observed that the company had a good June quarter performance. Lower interest costs further boosted net profit growth, it said, adding that while valuations are expensive, the stock is already factoring in optimism. It has raised earnings estimates due to higher revenue growth assumptions.

Brokerage: Citi | Rating: Sell | Target: Rs 1,255

The financial services firm said that the results have captured medium-and-long-term growth / return outlook. The business also captures management’s solid execution track record.

Brokerage: Jefferies | Rating: Hold | Target: Raised to Rs 1,470

Jefferies observed that strong execution continues despite increased competition in case of D-Mart. The firm is a key beneficiary in organised grocery retail space, it said, adding that the current valuation is factoring in 20 percent free cash flow growth till FY30. It has raised topline & EBITDA estimates by 3 percent/5 percent & 3.7 percent/5.4 percent For FY19/20.

The stock has gained over 8 percent in the past one month, while in the past three days, it has risen 6 percent. At 10:10 hrs Avenue Supermarts was quoting at Rs 1,645.55, up Rs 52.90, or 3.32 percent, on the BSE. It touched a 52-week high of Rs 1,663.80.

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First Published on Jul 31, 2018 10:15 am
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