Shares of Avenue Supermarts gained over 4% in early trade today after the firm, which operates the retail chain DMart, reported a 17.5% rise in consolidated net profit for the June 2024 quarter. Net profit climbed to Rs 773.8 crore for the first quarter of the financial year 2024-25 from Rs 658.8 crore in the year-ago period.
The stock climbed 4.29% to Rs 5,166.10 against the previous close of Rs 4953.35 on BSE. Market cap of the firm climbed to Rs 3.24 lakh crore.
Revenue climbed 18.6 percent YoY rise to Rs 14,069.1 crore in Q1 against Rs 11,865.4 crore a year ago.
Consolidated earnings before interest, Tax, Depreciation and Amortization (EBITDA) in Q1FY25 rose to Rs 1,221.3crore compared to Rs 1,035.3 crore in the corresponding quarter of last year. EBITDA margins rose 8.7 % in Q1FY25 to Rs 13,712 crore against Rs 11,584 crore in Q1FY24.
Standalone net profit rose 16.8 percent to Rs 812 crore for Q1FY25 as compared to Rs 695 crore in the corresponding quarter of last year.
Total revenue (Standalone) increased 18.3 percent at Rs 13,712 crore in Q1 compared to Rs 11,584 crore in the corresponding quarter of last year.
Nuvama has revised its price target upwards to Rs 5,091 against the earlier Rs 4,821 earlier. The brokerage has maintained ‘HOLD’ stance on the large cap stock.
“DMart’s Q1FY25 gross margin improved driven by the rise in contribution of General Merchandise & Apparel (GM&A), which is a positive, but was negated by increasing investments towards improving service levels and building capability for the future. Store productivity remains below pre-covid average. Addition of six stores this quarter is higher than same quarter last year,” said the brokerage.
“Factoring in a gradual uptick in store productivity, we are tweaking up FY25E/26E revenue by 1/3%. While introducing the FY27 estimates, we are rolling forward the target valuation to Q1FY27E earnings at an unchanged 75x PE, yielding a revised target price of Rs 5,091 (Rs 4,821 earlier). Maintain ‘HOLD’,” added the domesctic brokereage.
Amnish Aggarwal, Director of Research, Prabhudas Lilladher has assigned an accumulate call to to the firm with a price target of Rs 5,104.
“DMart results were in-line with our estimates indicating stabilization in operating parameters, as sale/store grew by 4.7% & sales/ft grew by 4.4% YoY despite opening larger size stores. Cost of retail inched up by 45bps YoY as Operating cost went up amid investments in improving service sales & building capability for the future, resulting in EBITDA margin miss of 17bps on our estimates. D’Mart added 6 stores in 1Q25 with size of each store higher by 50/20% YoY/QoQ. We estimate D’Mart to add 45 stores in FY25 (41 stores in FY24), with sustained focus on Tier-2/Tier-3 cities and potential to further accelerate store openings in coming years” said Aggarwal.