Avenue Supermarts Share Price: DMart Operator Drops On Weak Q4 Margin, Rising Costs
Shares of the Avenue Supermarts fell nearly 4% as several brokerages cut target price and turned cautious on the stock.
Avenue Supermarts Ltd.’s share price fell nearly 4% after the DMart operator posted a weaker-than-expected March quarter, with profit missing consensus estimates and operating pressures weighing on margins.
Consolidated net profit for the Radhakishan Damani-backed retailer declined 2.2% year-on-year to Rs 551 crore, falling short of Bloomberg’s consensus estimate of Rs 630 crore. Revenue rose 16.9% to Rs 14,872 crore for the quarter ended March, as per the company’s exchange filing.
Brokerages including Jefferies, Citi, and Nuvama flagged a drop in the general merchandise and apparel mix, higher discounting, and elevated operating expenses as key drags on profitability. They also pointed to intense competition in fast-moving consumer goods, inflation-linked wage hikes, and continued investments in improving service levels as factors compressing margins.
The contribution from general merchandise and apparel contracted by 50 basis points year-on-year, hurting gross margins. Jefferies described the earnings as a “margin shocker”, while Citi said earnings before interest, tax, depreciation, and amortisation have lagged revenue growth in 10 of the past 11 quarters.
DMart added a record 28 stores during the quarter, taking its total count to 415. The company added 50 stores in the financial year, up 22% from last year’s pace.
DMart Ready, the company’s e-commerce arm, expanded to 25 cities from 23. Management noted that home delivery is gaining traction in metros, although losses from the format are likely to continue in the near term.
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Avenue Supermarts Q4 Results Review: Margin Miss, Rising Costs Prompt Caution From Brokerages
DMart Share Price Today
DMart stock fell as much as 3.55% during the day to Rs 3,915 apiece on the NSE. It was trading 2.94% lower at Rs 3942.3 apiece, compared to a 0.37% advance in the benchmark Nifty 50 as of 9:42 a.m.
It has fallen 13.85% in the last 12 months and 11.18% on a year-to-date basis. The total traded volume so far in the day stood at 6.4 times its 30-day average. The relative strength index was at 39.29.
Ten out of the 21 analysts tracking the hypermarket chain have a 'buy' rating on the stock, nine recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 4021.69, implying an upside of 1.4%.
