Avenue Supermarts shares surge 4% after standalone revenue rises 35.8% YoY

D Mart-operator Avenue Supermarts shares rose 3.9% to Rs 4601.9 after the company reported standalone revenue from operations of Rs 10,385 crore in the quarter ended September 30, 2022, a 35.8% increase over the previous year.

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In comparison to Q2 FY20, which was the pre-pandemic quarter, when the standalone revenue was estimated to be Rs 5,949.01 crore, it nearly doubled in Q2 FY23. The company recorded standalone revenue of Rs 5,218.15 crore in Q2 FY21 and Rs 7,649.64 crore in Q2 FY22.

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The total number of D-Mart stores at the end of the quarter stood at 302, Avenue Supermarts informed the stock exchanges in a regulatory filing. While the company has provided its second-quarter business update, the financial results for the July-September period have yet to be published.

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“The company’s strategy of Everyday Low Prices (EDLP) will push sales during the current high inflation scenario and attract the middle-class to organised retail from unorganised retail,” according to domestic brokerage firm Prabhudas Lilladher.

The stock is rated “buy” with a target price of Rs 5,118.

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“With the festive demand hitting, D-Mart will witness strong growth in the zero Covid restrictions environment.  It has a huge growth runway, given a low probability of heightened competition in modern trade and 1,500+ store potential in existing clusters. We estimate 42% PAT CAGR over FY22-25” Prabhudas Lilladher added.

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The company’s share price today touched an intraday high of Rs 4601.9. The stock is presently trading at Rs 4513.55  up 1.99% from the closing price of Rs 4425.65 on Monday. Avenue Supermarts Limited has outperformed its sector by 1.12%.  The stock has been on the rise since last week and has gained 5.53%. It has risen 10% in the last six months but is down 4.5% for the year.