Avenue Supermarts shares declined 4.8% to an intra-day low of Rs 4,703. The company that operates DMart and is owned by Radhakrishna Damai is worried about revenue growth moderating due to lower store additions and store productivity.
“Revenue growth moderation was due to lower store additions in the past few quarters (except 4QFY24) and weaker store productivity (+1% YoY). We believe preference for convenience (rapid adoption of quick commerce) over value could also have contributed to growth moderation for DMART,” said Motilal Oswal in a research report.
The company‘s annualised revenue per store stood at Rs 150 crore, which was up only 1% on year compared to 4-7% growth over the last six quarters.
The brokerage house has a target price of Rs 5,800 with a “Buy” rating on the stock.
The company posted a standalone revenue from operations of Rs 14,050.32 crore, a 14% increase on year for the quarter ended September 30 of FY25 compared to Rs 12,308 crore reported a year ago during the same period.
The company’s net profit for the quarter stood at Rs 774 crore, rising 17.4% on year from Rs 659 crore reported in the same quarter a year ago.
Avenue Supermarts Vs Nifty 50
Shares of Avenue Supermarts have fallen almost 7% in the last five days and 6% in the past month. The stock has given a return of 3.2% in the last six months and 18% from year-to-date. The stock has risen 24% in the last year and over 150% in the past five years.
To compare, the benchmark index has fallen over 3% in the last five days. However, the index has given a return of 0.5% in the last one month. Nifty 50 has risen 12.5% in the last six months and 16.5% from year-to-date. The index has raised investors’ wealth by more than 30% in the last one year and 126% in the past five years.