Avenue Supermarts Limited, more commonly known as DMart, is a chain of hypermarkets and supermarkets in India.
The market capitalisation of Avenue Supermarts Limited, as of early July 2018, is a little over Rs.94,500 crore.
Company’s Wealth and Recent Performance
- For the fourth quarter of the financial year 2017-18, the company’s revenues from operations were reported to be at Rs.3,809 crore - a slight decrease from the income reported in the December quarter. In comparison to the March quarter of the previous fiscal, however, the company’s income grew by a little over 10%.
- Correspondingly, the net profit after tax for the quarter was stated to be at Rs.167 crore, in comparison to Rs.96.6 crore reported in the same period last year.
- Considering the performance of the company on a yearly basis, for the year ended on March 31, 2018, Avenue Supermarts Limited disclosed its revenue to be at Rs.15,009 crore. This is an increase of more than 20% in revenues reported for the previous financial year.
- A subsequent increase in net profit after tax for the year was also observed. The company’s net PAT was reported to be Rs.785 crore, in a sharp contrast to Rs.483 crore reported in the previous year. Similarly, its EBITDA for the year also increased by more than 10% to Rs.1,337 crore.
- The company’s non-current liabilities for the year were reported to be at Rs.293.7 crores of which borrowings are worth Rs.246 crore. It is worth mentioning that these metrics, at the end of FY17, were Rs.1,034 crore and Rs.980.92 crore respectively.
Avenue Supermarts Limited Stock Trends in 2018
- On January 2, 2018, the Avenue Supermarts Limited commenced trading at Rs.1,173 on the National Stock Exchange. The price rose slightly over the course of the month to enter the Rs.1,200 territory. In the second half, however, turbulence in the international markets caused the stock price to go below Rs.1,150. This slump was seen in the first week of February as well.
- The markets soon recovered thereafter and the share price of DMart went on an upward trajectory. On February 28, 2018, the stocks concluded trading for the day at Rs.1,348. To put things in perspective, the Avenue Supermarts shares delivered returns of more than 10% in just two months.
- The month of March was a fairly uneventful one for the investors as the share price stabilised at levels around Rs.1,350. The price started to soar once again in April and this time, the scrip crossed the Rs.1,450 mark. Throughout April, the Avenue Supermarts Limited shares traded hands at levels around Rs.1,480.
- In May, the prices dipped sharply and the shares went down to be traded in the Rs.1,300 region. However, this nosedive was almost immediately followed by an impressive spike in prices. In the final days of May, the DMart share price soared into the Rs.1,500 territory.
- In June, the stock showed signs of crossing the Rs.1,600 mark but its rise was halted abruptly. The price dipped in the second half of June and as a result, the scrip was being traded at levels above Rs.1,450. The closing price on June 29 was Rs.1,485.40.
Avenue Supermarts Limited Stock Trends in 2017
- Avenue Supermarts Limited made its first IPO in early March 2017 and at the end of the month, the shares were made available for trading on the stock exchanges. On March 21, the opening price of the DMart scrip was Rs.600 on the NSE.
- The stocks commenced a bull run shortly thereafter and by mid-April, the shares were changing hands at levels above Rs.750. The prices went down by a bit in May but the Avenue Supermarts shares maintain their bearings at levels above Rs.700. The prices rose once again in June and this time, scrip managed to cross the Rs.800 mark.
- Avenue Supermarts shares ended the month of June at Rs.815.10. The meteoric rise continued in July as well with the scrip crossing the Rs.900 mark this time around. Investors were sailing high on this bullish behaviour by the stock and they continued to make decent profits. Since its listing on the stock exchanges, the scrip was up by more than 10% by late July.
- At the end of August, the share price of DMart crossed the psychological barrier of Rs.1,000. Through most of September, investors were cautious as the stock price tried to stabilise at levels above Rs.1,000. It wasn’t until October that the prices spiked again and this time, they crossed the Rs.1,100 mark. In fact, the stocks were so bullish at the time that they went into the Rs.1,200 region before descending back to their previous levels at Rs.1,050.
- The prices didn’t vary a lot in November and December. The shares were traded in the Rs.1,100 region and the closing price at the end of the year was Rs.1,181 on the National Stock Exchange.
Should you invest in Avenue Supermarts Limited?
- Avenue Limited Supermarts is a supermarket chain in India that is known to offer highly competitive prices. In fact, its prices are 5-7 percent lower than its major competitors. DMart has managed to achieve this with the help of a strategy known as Everyday low cost - Everyday low price.
- Additionally, the company’s operational style has also proven to be a deciding factor in its success. It is able to save significantly on rent by avoiding big malls. It also owns more than 80% of properties through which it runs its stores. At the same time, the company is down to Earth and treats its staff with utmost respect and dignity.
- Financially speaking, the company has outdone its peers by a considerable margin. While big names like Aditya Birla Fashion and Future Life are struggling to report healthy numbers, Avenue Supermarts Limited has reported a net profit of Rs.784.66 crore for the FY2017-18. Its sales turnover is at Rs.15,000 crore for the year and this number is likely to increase in the future. For the FY18, the company reported its debt-equity ratio to be 0.09.
- Looking at the performance of the scrip itself, the stock has been on a bull run ever since it was listed on the bourses. As of early July 2018, the stock price has more than doubled since March 2017.
- Despite its strong fundamentals, it is still too early to predict whether the company’s stock is doing well because of its performance or because of the investors’ sentiments. In the long run, the performance of the company matters more than anything else. While this appears to be a good scrip, it is strongly recommended that you do your own research before investing.
DMart is a chain of supermarkets owned and operated by Avenue Supermarts Limited. The stores offer a wide-variety of products across different categories like groceries, home and personal care, bed and bath, fruits and vegetables, luggage, crockery, apparel, et cetera. It is essentially a one-stop shop for all your shopping needs. DMart is present in more than 150 locations across the country.
History of the Company
DMart was founded by Mr. Radhakishan Damani and his family back in 2002 in order to meet the growing needs of Indian families. The very first store was launched in Powai and after its massive success, the company expanded its operations in different regions of the country. The company went public in March 2017.
Management of the Company
Mr. Ramesh Damani - Chairman & Independent Director
Mr. Damani obtained his degree in Commerce from the H.R College of Commerce and Economics, University of Bombay. He followed this with an MBA from the California State University, Northridge. He has been actively involved in the securities market and prior to joining Avenues Supermarts Limited, he ran his own stock broking company under the name Ramesh S Damani Finance Private Limited.
Mr. Ignatius Noronha - Managing Director
Mr. Noronha presently serves as the Managing Director of Avenues Supermarts Limited. He has been a part of the consumer goods for more than 20 years of which, he spent eight years with Hindustan Unilever Limited. He finished his graduation at the S.I.E.S College of Arts, Science, and Commerce, Mumbai and followed it with a post-graduation from Narsee Monjee Institute of Management Studies.
Mr. Elvin Machado - Whole Time Director
Mr. Machado majored in Economics from the St. Xavier’s College, Mumbai. Before joining Avenue Supermarts Limited as a General Manager - Operations in 2007, he worked with Hindustan Unilever Limited for an astounding 19 years. His massive experience in the FMCG sector has been instrumental in the growth of this company.
Avenue Supermarts Limited Listings in NSE, BSE, and Indices
Avenue Supermarts Limited shares are available for trading on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective codes for the same are as follows:
- BSE Code: 540376
- NSE Code: DMART
- ISIN: INE192R01011
- Sector: Retail
The company, being relatively new on the bourses, is a part of the following stock market indices:
- NIFTY 500
- NIFTY 200
- NIFTY 100
- NIFTY Next 50
- S&P BSE 200
- S&P BSE AllCap
- S&P BSE LargeCap
- S&P BSE 500
Anjaneya Cooperative Housing Society Limited,
Opposite Hiranandani Foundation School
Orchard Avenue, Powai
Mumbai, Maharashtra - 400-076
Contact number: +91-22-33400500
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