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Motilal Oswal Report
Avenue Supermarts Ltd. posted revenue/profit after tax growth of 25%/7% YoY (6%/18% miss) in Q3 FY23, as weak discretionary demand pulled down same-store sales growth.
While higher size store too increased costs, employee/other expenses per square feet has seen visible cost savings, down down 6%/down 10% versus the pre-Covid level, translating into 5.7% profit after tax margin (closer to pre-Covid levels).
Lower footfall and weak demand in the discretionary non-fmcg segment, along with a 20% increase in the store size, affected store productivity, which may take few quarters to recover.
We estimate an Ebitda/profit after tax compound annual growth rate of 28%/26% over FY23E-25E.
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