Avenue Supermarts dips ~5% following Q2 updates

4 Oct 2024 , 02:38 PM

Shares of Avenue Supermarts Ltd., the parent of hypermarket chain D-Mart, were trading with losses of up to 5% on Friday, October 4.

Avenue Supermarts reported a 14% year-on-year increase in standalone revenues to ₹14,050 Crore in September 2024.

DMart, founded by Radhakishan Damani and his family, sells basic home and personal products in areas such as Gujarat, Madhya Pradesh, Andhra Pradesh, Maharashtra, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab, and Rajasthan.

Sales growth has slowed from Q1 levels, and store expansions are somewhat below expectations. Gross margins are likely to moderate sequentially as the product mix changes.

Following Avenue Supermart’s second-quarter business update, analysts at many broking companies had a mixed assessment on the company.

Morgan Stanley has given Avenue Supermart a ‘Overweight’ rating and set a price objective of ₹5,769 per share.

The international broking observed that D-Mart’s standalone revenue for the second quarter fell short of expectations, although operational metrics improved, albeit at a slower rate.

Morgan Stanley expressed disappointment with the growth trend and is now hoping for further clarity from management in the upcoming Q2 results on the decreased growth rate.

At around 2.09 PM, Avenue Supermarts was trading 4.71% lower at ₹4,710 per piece, against the previous close of ₹4,942.60 on NSE. The counter touched an intraday high and low of ₹4,875, and ₹4,696.10, respectively.

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