Neutral on Avenue Supermarts, target price Rs 2850: Motilal Oswal

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Neutral on Avenue Supermarts, target price Rs 2850:  Motilal Oswal


Motilal Oswal has neutral call on Avenue Supermarts with a target price of Rs 2850. The current market price of Avenue Supermarts Ltd. is Rs 3040.

Avenue Supermarts Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 192227.14 Crore) operating in Retail sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 7542.00 Crore, up 42.14 % from last quarter Sales of Rs 5306.20 Crore and up 10.77 % from last year same quarter Sales of Rs 6808.93 Crore Company reported net profit after tax of Rs 446.95 Crore in latest quarter.

Investment Rationale
The brokerage rolls over valuation to FY23E, valuing DMART at FY23E EV-to-EBITDA of 45x, (which is a ~20% discount to its three-year average multiple of ~55x). It retains Neutral recommendation, but raise the TP to INR 2,850 per share (v/s INR2,100 earlier).


Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of Sept 30, 2020, while FIIs held 10.3 per cent, DIIs 6.1 per cent and public and others 8.6 per cent.





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