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Avenue Supermarts share price drops after Q1 trading update
Avenue Supermarts share price fell over 1% on Wednesday after the operator of DMart stores reported its business update for Q1 FY25. DMart shares fell as much as 1.63% to ₹4,700.00 apiece on the BSE.
Avenida Supermarkets‘Standalone provisional revenue from operations in Q1 FY25 was ₹13,711.87 crore, registering a growth of 18.3% over ₹11,584.44 in the same quarter last year.
In a regulatory filing, Avenue Supermarts said its total number of stores as of June 30, 2024, was 371. The company added seven new stores in the quarter ended June 2024.
The company’s revenue per store rose 5% YoY to ₹149 crore. Revenue per sqft increased 4% YoY to ₹35,935. The gap between revenue/store and revenue/sqft stood at ~1%, according to brokerage Motilal Oswal.
“Revenue per sqft has been growing for the last 4-5 quarters (4-6% YoY growth in each quarter). Over the last three years, revenue per sqft has remained subdued due to addition of large-scale stores and weak discretionary spend (23-25% revenue contribution). This trend has been gradually reversing over the last 4-5 quarters, which is evident from the narrowing gap between revenue per store growth and revenue per sqft growth,” Motilal Oswal said.
The brokerage has a ‘Neutral’ rating on Avenue Supermarts stock with a target price of ₹5,310 per share.
Foreign brokerage Citi said DMart’s first-quarter business update shows no signs of accelerating growth and it remains cautious on the stock at its current valuation given risks around store additions, according to a report.
Citi believes the company’s revenue per square foot continues to be impacted due to adverse product mix and new store additions in smaller cities. It has a ‘Sell’ rating on Avenue Supermarts shares with a target price of ₹3,400 apiece.
Avenue Supermarts’ share price has surged over 10% in a month, while the stock is up over 17% year-to-date (YTD).
At 10:47 am, shares of Avenue Supermarts were trading 0.08 per cent lower at ₹ 4,774.00 apiece on the BSE.
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