DMart, Titan Q4 Results Review: HDFC Securities

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.Avenue Supermarts - Gross margin and apparel pain seems behind Two key incremental levers for DMart’s stock price performance from here are-store expansion pace (growth repercussions) and general merchandise and apparel performance (margin repercussions). On the former, while resources available (CWIP plus Cash and Eq + FY25/26 CFO) are good enough to make ~50-60 store additions annually for FY25/26; to step up this pace-real-estate availability needs to be solved for and perhaps,some fundraising may be needed (QIP money fully utilised). We don’t see DMart stretching itself for aggressive expansion (not their DNA). However, the latter (GM&A lever) is the easier one to pull. Based on H2 performance, GM&A pain seems behind (outpaced overall portfolio growth). This could help DMart improve on margins (built-in). We largely maintain our estimates (-2% each for FY25/26) and maintain our Reduce rating on DMart, with a DCF-based target price of Rs 3,600/share, implying 61 times FY26 price/earning..Titan - Growth preferred over margins; misses expectations Titan Company Ltd.'s jewellery (ex-bullion) sales grew 21.8% YoY to Rs 98.24 billion (our estimate: 105.62 billion). Domestic standalone jewellery sales (ex-bullion) grew 20%. Profitability took a back seat as elevated gold prices, softened demand and high competitive intensity arm-twisted Titan to increase promotional expenses to defend market share. Management highlighted that the competitive landscape is likely to remain intense for the foreseeable future. Consolidated Ebitdam contracted 98 bps YoY to 9.5% (our estimate: 11.2%). Jewellery Ebitm (ex-bullion) contracted by 134 bps to 11.1% (our estimate: 11.6%), courtesy-higher marketing spends to defend market share andhigh base effect from one-time inventory gains and custom duty benefits in the base quarter. Non-jewellery growth remained healthy (~21%) but disappointed on profitability. We tone down our FY25/26 EPS estimates by 4/3% to account for lower jewellery margins and maintain our Sell rating with a DCF-based target price is Rs 2,750/share (implying 50 times FY26 price/earning)..Click on the attachment to read the full report:.DMart Q4 Results Review - Strong Performance Continues: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

DMart, Titan Q4 Results Review: HDFC Securities

Avenue Supermarts' gross margin and apparel pain seems behind

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