Moneycontrol
Last Updated : Jan 14, 2019 04:19 PM IST | Source: Moneycontrol.com

Avenue Supermarts plunges 11% as Edelweiss, Prabhudas Lilladher maintain 'reduce' after Q3 nos

The company's Q3 revenue increased by 33 percent to Rs 5,451 crore, as against Rs 4,093.9 crore.

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Shares of Avenue Supermarts ended near day's low, down more than 11 percent on Monday as brokerages including Edelweiss and Motilal Oswal are remain bearish on the stock post the Q3 numbers.

The company has reported 2.1 percent jump in its Q3 net profit to Rs 257.1 crore against profit of Rs 251.8 crore in the same quarter last year.

Its revenue increased by 33 percent to Rs 5,451 crore, as against Rs 4,093.9 crore.

Operating profit or EBITDA was up 7.5 percent at Rs 453.4 crore, while margin was down at 8.3 percent.

Jefferies | Rating: Hold | Target: Up from Rs 1375 to Rs 1420

According to Jefferies, the strong execution and focus on market share gains gives confidence on topline, while margin expansion will be slow.

It feels that trajectory of earning growth will taper down.

Credit Suisse | Rating: Underperform | Target: Rs 1,150

This is another major miss making it two in a row and company will struggle to expand or even maintain its margin, said Credit Suisse.

The heavy discounting is led gross margin fall 170 bps YoY and it cuts FY19 EPS estimate by 7 percent.

The most worrying is the pace of new store addition, which is down 10 percent YoY in 9MFY19, it added

Edelweiss | Rating: Reduce | Target: Rs 1300

The increasing competition is going to make incremental margin expansion difficult, while store addition pace is slower than expected.

Motilal Oswal | Rating: Sell | Target: Rs 1400

According to Motilal Oswal the revenue prospects remain promising, while margin expansion is restricted.

Prabhudas Lilladher | Rating: Reduce | Target: Rs 1270

Broking house cut FY19 and FY20 EPS estimates of D’Mart by 10.7% and 5% following 200bps margin decline and just 2% PAT growth in 3Q19.

Margins have been impacted by higher spends behind new store infrastructure, people and expenses to manage festive demand through higher operating hours.

At the end, Avenue Supermarts was at Rs 1,395.75, down Rs 173.20, or 11.04 percent on the BSE.

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First Published on Jan 14, 2019 04:15 pm
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