Sell Avenue Supermarts; target of Rs 2668: Dolat Capital Market

The four stocks they exited are Macpower CNC Machines, NDR Auto Components, Novartis India and RSWM, according to Dolat Capital.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Dolat Capital Market's research report on Avenue Supermarts

Dmart reported a healthy recovery with revenue/EBITDA/APAT growth of 10.1/16.6/19.3% YoY. 11/52bps gross/EBITDA margin expansion YoY is enticing despite estimated inferior mix. Meagre one store additions (lowest in 14 quarters) was key negative. Dmart’s increased focus on online (Dmart ready) is positive. Inevitable strategic shift by Dmart towards online is positive in our view given the pace of e-commerce growth.  That said, in the near term online shift may impact store/area expansion and thus the growth of B&M stores. Simultaneously, online may take longer to deliver growth and may even pull-down earnings. In this back-drop, Dmart recent run-up of 44/63% in 3M/52-week low and rich-valuation at 93/74x FY22/23E standalone EPS leaves limited room to err. Dmart has historically traded at 87x 1-yr forward earnings.

Outlook

Sell with revised TP of Rs 2,668 @ 70x (vs. 60x earlier) Dec-22E EPS. Increase in target multiple is to factor strategic shift, business recovery/healthy margin and broader market re-rating.

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.