5,815 Cr (-34.09%) YoY | 6,256 Cr (-38.71%) QoQ
Year ending revenue: 24,870 Cr Vs. 20,005 Cr (24.34%)
Net Profit of 40.08 Cr
323.06 Cr (-87.62%) YoY 271.28 Cr (-85.29%) QoQ
Year ending Net profit: 1,301 Cr Vs. 903 Cr (44.08%)
EPS (in Rs.) 0.61
5.11 YoY |4.21 QoQ
Year ending EPS: 20.55 Vs. 14.46
View:
Result is below expectation. YoY revenue declined and profit significantly declined. Margin also corrected in this quarter.
Business Updates & Highlights:
Q4FY21 EBITDA was around INR 112 Cr Vs. 597 Cr in Q1FY21 therefore declined by 81.1% in YoY. EBITDA margin is around 2.9% Vs. 10.3% in YoY. 2 Stores were added in the Q1FY21.Net Profit is at Rs. 40 crore for Q1 FY21, as compared to Rs. 323 crore in the corresponding quarter of last year. PAT margin stood at 1.0% in Q1 FY21 as compared to 5.5% in Q1 FY 20.
Financial :
ROE and ROCE is around INR 18% and 26% respectively and book value per share is around INR 170 and share is currently trading at 13.7x of its book value. Company is currently trading at annualized PE of 186 which is very expensive as per Industry benchmark. Promoter holding is around 75% in the company which is strong and stable. FIIs and mutual fund hold around 9.6% and 5.7% in the company. The good thing is company is virtually debt free and realization is also very fair.
Position:
Share support price is INR 2180. Long term investor should continue with the company. Short term share can correct due to result is declined.
Share View:
Share price high 2,559 (52 week) and now 2,322. Avenue Supermarts Limited which owns and operates D-Mart stores. D-Mart is a national supermarket chain that offers customers a range of home and personal products under one roof. The Company offers a wide range of products with a focus on Foods, Non-Foods (FMCG) and General Merchandise & Apparel product categories. The Company offers its products under various categories, such as grocery and staples, dairy and frozen, fruits and vegetables, home and personal care, bed and bath, crockery, toys and games, kids apparel, apparel for men & women and daily essentials. As of June 30, 2020 the Company had 216 stores with Retail Business Area of 8.0 million sq. ft. across various states.
Opportunities:
D-Mart follows Everyday low cost - Everyday low price (EDLC-EDLP) strategy which aims at procuring goods at competitive price, using operational and distribution efficiency and thereby delivering value for money to customers by selling at competitive prices. During this quarter company has still opened two stores despite the strict lockdown on April and part of May. Company recovered to 80% or more of pre-Covid sales in most stores. Strong operating cash flow and realization with strong visionary promoters and continuously adding by FPIs and mutual fund Dmart is still in favorite
Risk:
Discretionary consumption continues to be under pressure, especially in the Non-FMCG categories. This is impacting gross margins negatively. Store operations and duration of operation per day continues to remain inconsistent across cities due to strict lockdowns enforced by local authorities from time to time. Like in Pune, Bangalore, Thane further shut down in the month of July, 2020 itself. In addition, in certain cities authorities are once again insisting on selling only essential products. Q2FY21 can also look like slight recovery as compare to Q1FY21. Unlike developed countries where organized retailers had a surge of customers walking into their stores, it has not happened with the same intensity at Dmart stores. India still has a strong and resilient network of small shops and neighbourhood stores and during the lockdown small shops did very well in terms of their customer needs.
Disclaimer:
Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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