Moneycontrol
Get App
Last Updated : Jan 15, 2019 11:39 AM IST | Source: Moneycontrol.com

Sell Avenue Supermarts; target of Rs 1400: Motilal Oswal

Motilal Oswal is bearish on Avenue Supermarts has recommended sell rating on the stock with a target price of Rs 1400 in its research report dated January 13, 2019.

Broker Research @moneycontrolcom
Representative image
Representative image
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Motilal Oswal's research report on Avenue Supermarts


Revenue grew robustly by 33% YoY to INR54.5b (in-line) in 3QFY19. However, the company continued facing margin pressure (gross margin down 170bp YoY to 14.7% off a high base), mainly due to its focus on price competitiveness. Consequently, EBITDA increased by a modest 7.5% YoY to INR4.5b (5% miss), with the margin contracting 200bp YoY to 8.3%. PAT, too, grew by a marginal 2.1% YoY (8% miss) to INR2.6b due to lower other income (-37% YoY) and higher depreciation/finance cost (+33%/36% YoY).


Outlook


However, valuations appear rich at 73x/54x FY20/21E P/E. We, thus, see limited room for re-rating. Maintain Sell with a TP of INR1,400 (prior: INR1,285), ascribing 65x P/E on FY20E (on the back of strong competitive moat).


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Jan 14, 2019 01:51 pm
More From
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant