Street View: India's Avenue Supermarts sinks to 1-1/2-year low after quarterly margins narrow, analysts cut TP

Avenue Supermarts

12/10/2026 05:19

** Shares of Avenue Supermarts AVEU.NS down 3.7% at 3,387.10 rupees, their lowest point since March 3, 2025
** Company's second-quarter consolidated net income of 7.44 billion rupees ($76.89 million), up 8.6% year-on-year
** Avenue Supermarts' revenue up 17.7% at 196.4 billion rupees
** Consol core margins narrow to 7.1% in quarter vs 7.3% last year 
     
MARGIN CONCERNS, STORE-LEVEL PRODUCTIVITY PRESSURE
** EBITDA margin contracted due to lower gross margin, higher operating costs, says Antique Stock Broking ('Hold", reduces TP to 3,547 rupees from 4,182 rupees)
** Flat gross margin owing to higher foods-FMCG mix coupled with higher opex due to wage inflation led to core margin contraction: Ambit ("Sell", cuts TP by 3% to 3,558 rupees)
** Rise in operating expenses, partly associated with store expansion, investments in technology and organisational capabilities, further weighed on EBITDA margins, Systematix Institutional Equities says ("Hold", cuts TP to 3,957 rupees from 4,331 rupees)
** Store expansion remained modest, but productivity softened, as evidenced by a multi-quarter low unit EBITDA for second quarter; Jefferies ("Hold", cuts TP to 4,000 rupees from 4,500 rupees

($1 = 96.7600 Indian rupees)

 (Reporting by Saikeerthi in Bengaluru)
 ((Saikeerthi@thomsonreuters.com; (+91) 8296756080))