Accumulate Avenue Supermarts; target of Rs 5104: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Avenue Supermarts with a target price of Rs 5104 in its research report dated July 30, 2024.

Broker Research

August 02, 2024 / 10:15 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Avenue Supermarts

D’Mart annual analyst call reinforced our positive stance given structural growth drivers in value retailing and stabilization in D’Mart Ready. We believe the worst is over as 1) D’Mart is confident of adding 40-45 stores for FY25 and 50-60 stores thereafter 2) Share of General Merchandise and Apparel (GMA - 22.4% of sales in FY24) has stabilized at 22-23% and 3) D’Mart is more confident of growth in D’Mart Ready with its ability to contain losses. D’Mart Ready is on fine footing with highly competitive consumer offering, improving efficiencies and strong salience in bigger cities like Hyderabad, Pune and Bengaluru, in addition to Mumbai.

Outlook

We factor in growth of 3.6% in Bills cuts and 3.2% in average bill value in FY25. We are building in EBIDTA margin expansion of 20bps/10bps in FY25 and FY26. We estimate 24.8% PBT growth in FY25 and 24.3% CAGR over FY24-26. We believe D’Mart has a huge runway of growth with 1500+ store potential and scale up in D’Mart Ready. D’Mart lacks near term triggers, although the stock will provide CAGR returns in long term. Accumulate

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