Radhakishan Damani Promoted Firm, Avenue Supermarts (dmartShares jumped nearly 4 per cent to Rs 4,091.9 per share on BSE intraday trade on Monday after the company reported a six-fold jump in profits and nearly doubling of revenue during the first quarter of FY 2022-23 (Q1FY23). , The DMart operator on July 9 reported a massive 490 per cent year-on-year growth in standalone profit for the quarter ended June. Standalone profit rose to Rs 680 crore during the June quarter, from Rs 115 crore in the corresponding period of the previous fiscal. Sequentially, profits rose nearly 46 percent. Standalone revenue from operations grew 95 per cent year-on-year to Rs 9,807 crore during the quarter ended June. The revenue growth on a sequential basis stood at 14 per cent.
Should investors buy, sell or hold DMart shares?
IDBI Capital maintained a buy rating with a target price of Rs 4,571 per share, which means a rise of 16 per cent. The brokerage has marginally adjusted the EPS estimates to 3-4 per cent during FY 2013-24E as it expects better revenue mix from modern sizable stores.
Domestic brokerage firm ICICI Direct said the company is a consistent compounder with 35 per cent CAGR growth in stock price over the last five years and remains India’s most profitable low-cost retailer, reflecting on India’s retail growth story. There is a strong play. Q1 review note.
The brokerage maintained buy recommendation on the stock with a target price of Rs 4,700 per share (up 19 per cent) from Rs 4,530 per share i.e. 5.5x FY24E EV/Sell. It said the results were broad on the profitability front driven by continued improvement in product mix.
Prabhudas Lilladher said, “We are raising our FY23/24 Earnings Per Share (EPS) estimate by 6.3/6.5 per cent and target price by Rs 4,636 (earlier Rs 4,340) after strong sales and profit momentum. Due to zero impact of COVID In the normal quarter, the company opened 110 large stores in the last three years.”
“While gross margin and core profit margin are trending towards Q1 2020, they cannot be extrapolated to seasonality and should normalize over the course of the year. We estimate that for the remaining three quarters of 2022-23 31 per cent year-on-year profit after tax hike and 47.3 per cent after tax compounded annual rate in FY22-24. We continue to buy with a DCF based target price of Rs 4,636; 17 per cent in the stock price in the last 5 sessions Given the jump in percentage, the returns could be a bit back-ended,” he said.
Meanwhile, Motilal Oswal said DMart’s strong growth footprint and cost optimization resulted in healthy EBITDA/PAT CAGR of 19 per cent/26 per cent, however, revenue/sq. Foot remains under pressure due to the impact of inflation on the discretionary category and higher store size.
Brokerage factors in a strong FY22-24E EBITDA/PAT CAGR of 37 per cent/50 per cent, with a 17 per cent footprint CAGR, and cognizance of the prominence of the new-age kirana model, rich valuations and weak revenue per segment. In the last few quarters ft. It gives a neutral outlook with a target of Rs 3,500.
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