Mehabe score: 4 G Factor: 5 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 5.
Description
Avenue Supermarts is primarily engaged in the business of organized retail and operates supermarkets under the brand name of D-Mart.(Source : 202003-01 Annual Report Page No:111)
Main Points
Store Network #
Avenue Supermarts operates 234 stores across 11 states and one union territory with a 11.8 million square ft retail business area. AVL has its highest presence in Maharashtra with 58 stores and followed by Gujarat with 26 stores. Presence is limited to western and southern Indian States as the company follows cluster based expansion resulting in low cost structure.Site:DMARTMain Symbol:DMART
Stock trades at 3378.0, above its 50dma 3181.63. It also trades above its 200dma 2833.21. The stock remains bullish on techicals
The 52 week high is at 3425.00 and the 52week low is at 1900.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Stock is trading at 17.96 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 13.16% for last 3 years.
Competition
– The industry trades at a mean P/E of 137.7x. Avenue Super. trades at the industry’s max P/E of 198.99x. DMART trades at a P/E of 199.0x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 5.0. DMART has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is 7.8%. The max 1- month return was given by Future Retail: a return of 16.21 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 5183.0 cr compared to Rs 3883.0 cr for period ended Jun 2020, a rise of 33.5%
Operating Profits reported at Rs 224.0 cr for period ended Jun 2021 vis-vis 112.0 for period ended Jun 2020 .
Operating Margins expanded 143.7 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.47 compared to Rs 6.39 for previous quarter ended Mar 2021 and Rs 0.62 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 25443.0 cr for period ended TTM vis-vis sales of Rs 24143.0 cr for the period ended Mar 2021, a growth of 5.1%. The 3 year sales cagr stood at 8.3%.
Net Profit reported at Rs 1155.0 cr for period ended TTM vis-vis sales of Rs 1099.0 cr for the period ended Mar 2021, rising 4.8%.
Company recorded a Net Profit CAGR of 8.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1375.0 cr for period ended Mar 2021 vis-vis Rs 1280.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 45% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is -3% vis-vis a compounded sales growth of 17% over the last 3 Years. – The compounded profit growth on a TTM basis is -15% vis-vis a compounded profit growth of 12% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 10.04% vis-vis 10.17% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 8.26% vis-vis 8.26% for Mar 2021
Conclusion
– is almost debt free. – Stock is trading at 17.96 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 13.16% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 3181.63 and is trading at 3378.0, thus bullish price action wise.
