Last Updated:
Avenue Supermarts Share Price: On Monday, January 13, shares of Avenue Supermarts fell by 5.7%; Should buyers purchase, promote or maintain?
DMart shares
Avenue Supermarts, backed by ace investor Radhakishan Damani and the operator of the DMart retail chain, reported its Q3 outcomes over the weekend. On Monday, January 13, shares of Avenue Supermarts fell by 5.7%, reaching Rs 3,474 on the BSE as buyers expressed disappointment over the corporate’s efficiency.
For Q3FY25, DMart posted a 17.5% year-on-year (YoY) progress in standalone income, reaching Rs 15,565 crore. Profit rose 6.5% YoY to Rs 785 crore. However, the retailer’s EBITDA margin dropped to 7.9% in Q3FY25, in comparison with 8.5% in the identical interval final 12 months. Similarly, the PAT margin decreased to five% from 5.5% YoY. Analysts recommended that DMart’s margins are more likely to stay below strain as a consequence of heightened competitors and the corporate’s concentrate on gaining market share over bettering margins.
During the quarter, same-store gross sales progress (SSSG) for shops open for 2 years or extra was 8.3%. Avenue Supermarts’ Managing Director and CEO, Neville Noronha, famous that whereas discounting within the FMCG class remained intense, the influence on high-turnover shops in metro cities was decrease than within the earlier quarter (Q2 FY25).
For the primary 9 months of FY25, DMart recorded a 21.5% progress. The firm additionally highlighted a surge in demand for house supply providers, which has now surpassed the gross sales contribution from pick-up factors. Noronha emphasised that the corporate would proceed to supply each house supply and pick-up level choices, with house supply changing into the first channel in a number of cities.
Analysts’ Views
Following the Q3 outcomes, Jefferies India Pvt Ltd famous that whereas DMart noticed an acceleration in same-store gross sales progress, EBITDA margins fell beneath expectations as a consequence of a shift towards greater meals gross sales, which led to a decrease gross margin. The greater employees and working bills additional impacted profitability, with EBITDA rising 10% YoY and web earnings rising by 6%. However, each figures missed Jefferies’ and consensus estimates.
Jefferies analysts have diminished their FY25-27 EPS estimates by 3-6% and maintained a HOLD score with a revised goal worth of Rs 4,225.
Motilal Oswal Financial Services (MOFSL) additionally downgraded its FY25-27 EBITDA estimates by 4% as a consequence of rising prices and intensified competitors from Quick Commerce (QC). MOFSL has reduce its FY25-27 EPS estimates by 4-7% and reiterated a Buy score with a revised goal of Rs 4,450 (down from Rs 4,750).
Management Changes
DMart additionally introduced the appointment of Anshul Asawa as CEO Designate and Senior Managerial Personnel, efficient March 15, 2025. Ignatius Navil Noronha, who’s presently serving as Managing Director, will full his time period on January 31, 2026. Asawa will succeed him as MD and CEO, topic to shareholder and regulatory approvals.
Following the administration announcement, Jefferies analysts commented that whereas they don’t anticipate important adjustments, they hope for a decisive improve in retailer additions, a complete technique to deal with rising competitors, and improved disclosures below the brand new CEO.
