Avenue Supermarts share fell nearly 2% today after the firm’s Q1 earnings fell below estimates. The DMart operator reported a 132% rise in standalone net profit at Rs 115 crore in Q1 against Rs 50 crore in the year-ago period.
Share of Avenue Supermarts lost 1.98% to Rs 3,378 against previous close of Rs 3,378.95 in early trade. The stock has lost 1.17% in the last 3 days. Avenue Supermarts stock trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
The share has gained 43.75% in one year and risen 20.7% since the beginning of the year. Market cap of the firm fell to Rs 2.16 lakh crore on BSE.
Total 0.90 lakh shares changed hands amounting to turnover of Rs 30.41 crore.
The DMart operator reported a 132% rise in standalone net profit at Rs 115 crore in Q1 against Rs 50 crore in the year-ago period.
Revenue rose 31% to Rs 5,032 crore in Q1 as compared to Rs 3,833 crore in June 2020.
Earnings before interest, tax, depreciation and amortization (EBITDA) in Q1 stood at Rs 221 crore compared to Rs 109 crore in the corresponding quarter of last year. EBITDA margin stood at 4.4% in Q1FY22 as compared to 2.8% in Q1FY21.
Basic earnings per share (EPS) for Q1FY22 stood at Rs 1.78 compared to Rs 0.77 for Q1FY21.
Motila Oswal said the share is available at expensive valuations. The brokerage sees a risk of a moderation in growth owing to strong traction for online retailers in a post-COVID world as the presence of deep pocket players like Amazon and Reliance Retail restricts the near-term upside. The brokerage values DMART at 52 times FY23E EV/EBITDA (which is around its average multiple of 57x). It retained Neutral rating and target price of┬а Rs 3,220 per share.
Citi gave a sell rating to the stock with a target price of Rs 2,210. The brokerage has maintained a buy call on the stock on the back of weak Q1 earnings, which led to trimming of consensus estimates by another 8% for the full year.
Morgan Stanley downgraded the firm to equal-weight with a target of┬а Rs 3,268 as Q1 earnings missed its & consensus estimates. It will await a better entry point due to lack of near-term triggers.
However, Goldman Sachs gave a buy rating to stock at a target of Rs 3,690.
The company’s results were below expectations on the back of a lower gross margin. The brokerage house lowered its FY22 EPS estimates by 7.9% to reflect a lower margin in Q1. The brokerage feels the margin impact will be one-off as a consequence of COVID restrictions.
