homemarket Newsstocks NewsAvenue Supermarts shares drop after March quarter revenue declines sequentially, brokerages cautious
Avenue Supermarts shares drop after March quarter revenue declines sequentially, brokerages cautious
Over a three-year period, the company's revenue has grown at a Compounded Annual Growth Rate (CAGR) of 18.6 percent.
Shares of Avenue Supermarts Ltd, which operates D-Mart retail stores, dropped over 3 percent on Thursday after the company's March quarter revenue declined 8.5 percent on a sequential basis. It attributted the decline in revenue to seasonality factors.
On a year-on-year basis, standalone revenue increased 20 percent for the March quarter.
Over a three-year period, the company's revenue has grown at a Compounded Annual Growth Rate (CAGR) of 18.6 percent. The company added 18 stores in the March quarter, taking the total number of stores to 324. 40 new stores were opened in financial year 2023.
Brokerage firm JPMorgan believes that the current valuations are demanding, amid a lack of meaningful EPS upside triggers. JPMorgan has an underweight rating on Avenue Supermarts with a price target of Rs 3,300.
Citi has also expressed caution at current levels citing the risk around margins, earnings, and price-to-earnings multiples. The firm cited Average Revenue per Square Feet declining 3 percent on a three-year CAGR basis. It has a sell rating on the stock with a price target of Rs 3,460.
Morgan Stanley, however, gave an Equal-Weight rating on the stock and it expects around 5 percent upside with price target of Rs 3,853 per share.
The brokerage noted that on a four-year CAGR basis, revenue was up 19.7 percent, lower than 20 percent, 20.8 percent and 21.1 percent in the first three quarters of the year.
Shares of Avenue Supermarts are trading 3.7 percent lower at Rs 3,519.95. The stock is down 13.5 percent so far this year.
(Edited by : Rukmani Krishna)
First Published: Apr 6, 2023 11:47 AM IST
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