Street View: Merch, apparel segment recovery key for India's Avenue Supermarts - analysts

Avenue Supermarts

16/10/2023 05:22

** DMart operator Avenue Supermarts  AVEU.NS  on Saturday
posted a 9.9% drop in Sept-qtr net profit after tax on higher
expenses, while revenue from operations rises 18.5%
    ** AVEU says gross margins continue to be lower YoY over
lesser contribution from higher margin general merchandise and
apparel business

    RECOVERY IN GENERAL MERCHANDISE & APPARELS IS KEY
    ** Ambit Capital ("Sell", PT cut to 3,084 rupees from 3,089
rupees) says it believes recovery of general merchandise &
apparel (GMA) segment would be difficult until DMart considers
apparel as a separate business unit
    ** Antique Stock Broking (Rating downgraded to "Hold", PT
cut to 3,893 rupees) says key monitorable for DMart's
performance will be recovery in GM&A sales, recovery in mature
stores to pre-pandemic levels, and inflationary trends
    ** Jefferies ("Hold", PT raised to 3,850 rupees from 3,700
rupees) says H1FY24 per-store transaction volume up 21% shows
improvement in footfalls though it was still lower than
pre-pandemic peaks
    ** DMart added just 9 stores in 2Q and 12 in H1FY24 vs 18 in
1HFY23. However, we continue to build in ~40 store adds for the
full year, as DMart typically accelerates store adds in H2 -
Jefferies

 (Reporting by Rama Venkat in Bengaluru)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607;))