DMart Shares Decline Over 4% After Q2 FY24 Earnings Report

DMart Shares Decline Over 4% After Q2 FY24 Earnings Report

VoM News Desk | October 16, 2023 | 10:51 AM IST | Breaking News | Follow on Google News

DMart Shares Decline Over 4% After Q2 FY24 Earnings Report

DMart Shares Decline Over 4% After Q2 FY24 Earnings Report

Avenue Supermarts, the operator of DMart retail chain, reported its earnings for the quarter ended September 2023. The company’s financial results for the quarter led to a decline in DMart shares. Here are the key details:

• DMart shares fell by as much as 4.09% to ₹3,771.70 apiece on the BSE following the earnings announcement.
• Avenue Supermarts reported a consolidated net profit of ₹623.35 crore for Q2 FY24, reflecting a 9.09% drop compared to the year-ago period.
• The company’s consolidated revenue from operations for the same quarter grew by 18.66% to ₹12,624.37 crore, YoY.
• Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) during the quarter amounted to ₹1,005 crore, compared to ₹892 crore in the corresponding period of the previous year.
• The EBITDA margin compressed to 8.0% from 8.4%, YoY.

The CEO and Managing Director of Avenue Supermarts, Neville Noronha, mentioned that gross margins were lower compared to the same period in the previous year due to a reduced contribution from the higher-margin General Merchandise and Apparel business.

Analyst Reactions and Outlook:

Several brokerage firms shared their perspectives on Avenue Supermarts’ Q2 results and stock price:

1. Nuvama Institutional Equities: The firm noted that Avenue Supermarts reported a miss with EBITDA up only 12% YoY, mainly due to the underperformance of General Merchandise & Apparel (GM&A). They adjusted their estimates for lower GM&A share/gross margin and retained a “Hold” rating on the stock with a target price of ₹4,021 per share.
2. Motilal Oswal Financial Services: Motilal Oswal cut FY24 PAT estimates by 4.6% but expects gradual improvement from H2FY24. They reiterated a “Buy” rating on the stock with a target price of ₹4,500 per share.
3. Centrum Broking: The company remains attracted to DMart’s execution skills and sees significant growth potential in the organized grocery retail industry in India. They adjusted EPS estimates for FY24/25 and maintained a “Buy” rating with a target price of ₹5,006 per share.
4. Antique Stock Broking: Avenue Supermarts’ Q2FY24 performance was impacted by the underperformance of general merchandise, leading to a drop in gross margin. The brokerage downgraded the stock to “Hold” and reduced the target price to ₹3,893 per share.

At 9:30 am, DMart shares were trading 2.49% lower at ₹3,835.00 apiece on the BSE.

The market’s reaction reflects the impact of the earnings results on DMart shares and the assessments made by analysts regarding the company’s performance and future prospects.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.