Avenue Supermarts share price declined 6 percent in the morning trade on July 13 after the company posted a weak set of numbers for the quarter ended June 2020.
The company has reported an 87.6 percent fall in profit the June quarter at Rs 40.09 crore versus Rs 323.09 crore reported in the corresponding period last fiscal.
Revenue from operations fell 33.2 percent year-on-year to Rs 3,883.2 crore in the quarter.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) plunged 81.2 percent YoY to Rs 112 crore and margin dropped significantly by 740 bps to 2.9 percent in the June quarter 2020.
Credit Suisse has maintained "underperform" rating with a target at Rs 2,000 per share.
According to Credit Suisse, the full impact of COVID led to 85 percent profit decline in Q1, while the current run rate is also a concern.
It cut FY21/22 earnings estimates by 13 percent/8 percent, CNBC-TV18 reported.
"For 1QFY21, Avenue Supermarts' top-line de-grew by ~33% yoy to Rs 3,883 crore. Top-line was negatively impacted mainly due COVID-19 lockdown. Currently, the company’s most of the stores operate at 80% of pre-covid sales level. However, discretionary consumption continues to be under pressure, especially in the Non-FMCG categories," said Amarjeet Maurya, AVP - Mid Caps, Angel Broking.
"On the operating front, the company reported margin contraction (down by 738bp YoY to 2.9%), primarily on account of lower sales. The reported net profit de-grew by ~88% YoY to Rs 40 crore due to lower sales and poor operating performance," he added.
At 0932 hours, Avenue Supermarts was quoting at Rs 2,266.60, down Rs 55.55, or 2.39 percent on the BSE.