Avenue Supermarts Q3 Review - Accumulate In Third Covid-19 Wave Uncertainty: Prabhudas Lilladher
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.
Prabhudas Lilladher Report
We remain optimistic on Avenue Supermarts Ltd. post Q3 results as it has reported strong growth despite higher inflation and lower mobility impacting sales of non-essentials like apparel and general merchandise (440 basis points decline in sales share to 22.9% in FY21 also).
Q3 margin expansion of 26 bps led by cost control shows the robust business model despite deterioration in sales mix and operating cost of 17 new stores opened in Q3 (other expenses up 15.2% YoY and 12.6% QoQ versus just 5.9% increase YoY in H1 FY22). With third Covid-19 wave coming in full fury, we expect near term uncertainty and increased share of essentials in sales mix.
We are increasing store openings in FY22 to 40 (35 earlier) even as we factor in slight moderation in margins even as high inflation will give some sourcing benefits to D-Mart.
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.