BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Avenue Supermarts Ltd.'s Q3 FY23 was tepid across parameters viz. revenues, mix, margins and store adds. Revenue/square feet was ~down 9.5% same-stores sales growth versus pre-Covid.
Adverse product mix impacted gross margin which was lowest ever in Q3 at 14.3% (down 60/down 20 basis points YoY/QoQ). Higher other opex (up 39/6% YoY/QoQ) impacted margins.
After healthy store adds in H1 (18), it was muted in Q3 at four. We reduce our revenue estimates by 3/6/6% for FY23-25 and earnings per share by ~7/13/12% to factor weaker performance.
DMart stock price has seen a healthy time and price correction. But, in backdrop of weak recovery, we expect the stock to go through a further time and price correction in near-term.
Weak revenue growth coupled with muted margin has accentuated problems in near-term and warrant multiple reduction; but for long-term growth and strong business fundamentals of DMart.
Lower than expected SSSG, store expansion, cannibalisation, and shift in organized market to online with DMart's slow transition are other key risks.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
