Avenue Supermarts Q1 Review - A Beneficiary Of Consumers Seeking Value For Money, Inflation: ICICI Securities

DMart store. (Source: BloombergQuint)

Avenue Supermarts Q1 Review - A Beneficiary Of Consumers Seeking Value For Money, Inflation: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Avenue Supermarts Ltd.'s Q1 revenue performance was decent in the context of strict operating restrictions.

However, a ~130 basis points YoY decline in gross margin was concerning given sales mix would have been largely comparable (weak general merchandise); Ebitda margin expansion was led by operating leverage.

In FY22 and beyond, we believe, it will benefit from:

  1. the (consumer) relevance of value for money positioning, which, in our view, may potentially be a stronger competitive advantage in FY22-23E and

  2. price-led operating leverage (beneficiary of inflation in staples, fast moving consumer goods).

Recovery in general merchandise and apparel should also be swift (as seen last year as well).

Click on the attachment to read the full report:

ICICI Securities Avenue Supermart Q1FY22 Results Update.pdf

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