MOSL: Avenue Supermarts (Sell) - Results in-line - but like-to-like growth declines
Avenue Supermarts: Results in-line; but like-to-like growth declines
(dmart IN, Mkt Cap USD11.2b, CMP INR1467, TP INR900, 39% Downside, Sell)
Revenue and margins in line with estimates
- DMart’s revenue increased 22% YoY to INR38.1b (est. of INR38.9b) in 4QFY18. EBIDTA grew 42% YoY to INR2.9b (est. of INR3.1b), with the margin expanding 100bp YoY to 7.7%.
- Other income rose 51% YoY to INR0.2b (est. of INR0.1m). Adj. PAT grew 73% YoY to INR1.6b (est. of INR1.7b) in the quarter. PAT margin expanded 100bp YoY to 4% (est. of 4.5%).
- On a full-year basis, revenue rose 26.3% to INR150b, EBITDA grew 38.8% to INR13.3b and PAT rose 62.6% to INR7.8b.
Cluster-based expansion continues, but like-for-like growth down for full year
- DMart added 24 stores in FY18, of which 14 were in 4Q. Total store count rose from 131 in FY17 to 155 in FY18, and at a 16% CAGR over FY13-18.
- However, like-for-like growth declined from 21.2% in FY17 to 14.2% in FY18, which can be ascribed to factors such as GST implementation and a low base (demonetization impact).
Avenue Supermarts Limited is an India-based company, which owns and operates DMart stores. DMart is a supermarket chain that offers customers a range of home and personal products under one roof. Each DMart store stocks home utility products, including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and others. The Company offers its products under various categories, such as bed and bath, dairy and frozen, fruits and vegetables, crockery, toys and games, kids apparel, ladies garments, apparel for men, home and personal care, daily essentials, grocery and staples, and DMart brands. DMart has a presence in over 110 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana and Chhattisgarh. The Company has multiple stores in cities, such as Mumbai, Ahmedabad, Baroda, Bengaluru, Hyderabad, Pune and Surat.
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