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Motilal Oswal Report
Avenue Supermarts Ltd.'s consolidated Ebitda/profit after tax grew 26%/24% YoY on strong store adds, with revenue coming in 35% above pre-Covid-19 levels (Q3 FY20). Lower cost of retailing has aided a 60 basis points improvement in the Ebitda margin since the pre-Covid quarter (Q3 FY20).
We factor in a robust FY22E–24E Ebitda/profit after tax compound annual growth rate of 46%, with a strong footprint addition – as we see limited impact on growth despite the Covid-19 impact over the last four to six quarters. This enables the stock to operate at approximately two times price/earnings-to-growth. However, we are cognizant of the prominence of new-age grocery models and rich valuations.
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