DMart Share Price Rises Over 4% After Avenue Supermarts Reports Strong Q1 Results
DMart shares opened at ₹5,126.45, up 3.69% from the previous close of ₹4,943.65.
Stock Market Update: DMart (Avenue Supermarts Ltd) witnessed a significant rise in its share price, gaining more than 4% in early trades on Monday. This surge comes on the back of the company’s robust financial performance for the April-June quarter, which met analysts’ expectations.
Key Highlights:
- Opening Price: DMart shares opened at ₹5,126.45, up 3.69% from the previous close of ₹4,943.65.
- Intraday High: The stock climbed further to ₹5,164, marking a 4.4% increase on the NSE.
Q1 Performance In Line with Expectations:
DMart, which announced its Q1 FY24 results on Saturday, July 13, reported a 17.5% increase in consolidated net profit, amounting to ₹773.8 crore, compared to ₹658.8 crore in the same period last year. The company's operating revenue grew by 18.6%, reaching ₹14,069 crore from ₹11,865.4 crore in the corresponding period of the previous year.
The standalone Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) rose by 18% year-on-year to ₹1,220 crore, aligning with consensus estimates.
Analyst Insights:
- Jefferies India Pvt Ltd: Analysts at Jefferies noted that the EBITDA and revenue growth were in line with their expectations. They highlighted that revenue growth was healthy at 18% YoY, driven by new store additions and low-double-digit same-store sales growth (SSG).
Jefferies analysts also commented that the worst seems to be over in terms of store additions and mix. However, they expressed caution over the stock's valuation, noting that at 90 times one-year forward price-to-earnings, it remains at a steep premium to its peers. Despite this, they have slightly adjusted their earnings estimates for FY25-27 and maintained a Hold rating with a revised target price of ₹4,600.
Conclusion:
DMart's impressive Q1 performance has instilled confidence among investors, reflected in the substantial rise in its share price. While the company's growth trajectory appears strong, analysts urge caution due to the high valuation. As the fiscal year progresses, it will be interesting to see how DMart navigates the competitive retail landscape and continues to deliver value to its shareholders.
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