What should investors do with Avenue Supermarts post Q4 results: buy, sell or hold?

Consolidated revenue from operations grew by 18.5 percent year-on-year to Rs 7,411.7 crore in Q4FY21, the company added.

May 10, 2021 / 09:43 AM IST
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Avenue Supermarts share price rose more than 2 percent in early trade on May 10 after the company announced its March quarter results.

D-Mart retail chain operator Avenue Supermarts on May 8 clocked a healthy 52.6 percent year-on-year growth in consolidated profit at Rs 413.88 crore in the quarter ended March 2021.

Consolidated revenue from operations grew by 18.5 percent year-on-year to Rs 7,411.7 crore in Q4FY21, the company added.

Also Read - D-Mart operator Avenue Supermarts Q4 profit jumps 52.6% to Rs 414.2 crore

Here is what brokerages have to say about the stock and company after the March earnings:


Prabhudas Lilladher | Rating: Buy | Target: Rs 3,360

We cut our EPS estimates by 20.1%/4.7% in FY22/23, however, we remain optimistic about the long term growth story of D-Mart.

The worst seems over, although near term outlook remains weak due to disruption led by night curfew, weekend closure in certain cities, supply issues in non FMCG goods and mix impact as apparel, laundry, footwear and travel segments remain impacted.

Dolat Capital | Rating: Reduce | Target: Rs 3,033

Lower than expected store expansion, significant shift in the organized market to online and D-Mart’s slow transition are key risks to an otherwise strong business trajectory in a large addressable market opportunity.

Motilal Oswal | Rating: Neutral | Target: 2,850

We expect D-Mart to deliver an FY20-23E revenue/PAT CAGR of 23%, factoring in -5%/50% SSSG and 30/40 store adds over FY22/FY23E. Unlike other retailers, grocery retailers such as DMart have seen swift earnings recovery from COVID-19.

ICICI Direct | Rating: Hold | Target: Rs 3,130

For FY21, the company reported marginal revenue de-growth of 3% with SSSG coming in at (-) 13.1% (vs. 10.9% in FY20). Owing to regional lockdowns and restriction on selling of GM & apparel, we prune our revenue and earnings estimates by 10% and 16%, respectively for FY22E and bake in revenue and earnings CAGR of 21% and 25%, respectively, in FY20-23E.

JPMorgan | Rating: downgrade to underweight | Target: Rs 2,700

The risk-reward is unfavourable considering the severity of the second COVID wave. The second COVID wave may delay revival for footfalls into stores.

At 09:21 hrs, Avenue Supermarts was quoting at Rs 2,919.20, up Rs 30.45, or 1.05 percent on the BSE.

The share touched a 52-week high of Rs 3,328 and a 52-week low of Rs 1,900.00 on 05 March, 2021 and 20 July, 2020, respectively.

Currently, it is trading 12.28 percent below its 52-week high and 53.64 percent above its 52-week low.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: May 10, 2021 09:31 am

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