Shares of Dalal Street veteran Radhakishan Damani-owned Avenue Supermarts, which runs the DMart chain of retail stores, were trading almost flat during Tuesday's noon deals, a day after the company posted its June quarter business update. At 3 pm, the scrip was trading 0.30 percent lower at Rs 3,857.20 apiece on the NSE.
In the last one month, DMart shares gained 9.13 percent while it tumbled 5.23 percent on a year-to-date basis. Analysts at Motilal Oswal are positive about the stock, with a target price of Rs 4,200, implying a potential upside of 9 percent on the counter from the current market levels.
In terms of technicals, the 14-day relative strength index (RSI) stood at 57.5, implying the stock is neither oversold nor overbought. Money flow index (MFI) was at 64.6. DMart shares are trading higher than 20 day, 50 day, 100 day and 200 day moving averages.
The company reported Rs 11,584 crore standalone revenue for the first quarter ending June, which when compared to the January-March quarter, implies growth of 12.1 percent.
The company has added three stores during the quarter under review, taking the total store count to 327 at the end of June. On a year-on-year basis, store addition grew at 11.2 percent.
With revenue growth exceeding the growth in store addition during the quarter, it implies a positive same-store sales growth for the company during the quarter. The exact figures for the same will be available only during Avenue Supermarts' quarterly results.
“Weak SSSG (same-store sales growth) has weighed on DMart’s stock price performance in the recent past," domestic brokerage house Motilal Oswal wrote in its note earlier.
Aside from the same-store sales growth, what would also be important to track in the quarterly results would be the product mix, and whether that has contributed to any potential margin improvement during the quarter.
RK Damani has earned the big bucks from the stock over the years from value investing. As of March 2023, Damani held a 23.12 percent stake or 149,848,238 shares in the company.
(Edited by : C H Unnikrishnan)
First Published: Jul 4, 2023 3:29 PM IST
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