Avenue Supermarts m-cap crosses Rs 2 trillion; stock zooms 49% in 3 months

The company's board is slated to meet on January 9 to consider financial results for the quarter ended December 2020

Shares of Avenue Supermarts, which runs the D-Mart chain of stores, were trading higher for the sixth straight day, up 3.3 per cent at Rs 3,094.95 on the BSE on Wednesday.

The stock was quoting at its all-time high level and has rallied 16 per cent in the past six sessions. Following the rise in stock prices, Avenue Supermarts' market capitalisation crossed the Rs 2 trillion mark in intra-day trade today.

At 09:48 am, Avenue Supermarts stock was trading 2.3 per cent higher at Rs 3,065 with a market cap of Rs 1.99 trillion on the BSE, the exchange data showed. In comparison, the S&P BSE Sensex was up 0.06 per cent at 48,468.

The board of directors of Avenue Supermarts are scheduled to be held on Saturday, January 9, to consider the financial results of the company for the quarter ended December 2020 (Q3FY21).

In the past three months, the stock has zoomed 49 per cent, against a 22 per cent rally in the S&P BSE Sensex. While announcing the July-September quarter (Q2FY21) results, the company's management had said that month-on-month (MoM) sales have improved during this quarter – August was better than July and September was better than August. The management had added that the progress of the Covid pandemic and its impact on consumer spending during the festival period will determine the company's financial performance for the Q3FY21.

D-Mart’s core ‘food & FMCG’ segment (currently around 77 per cent of sales) reverted to the growth path in September with a positive trajectory seen across all stores. Further, it expanded its e-commerce operations in select pin codes of Pune. Trends indicate an enhanced focus on e-commerce owing to change in industry dynamics with grocery e-commerce industry gaining significant traction during the pandemic.

Analysts at ICICI Securities believe robust liquidity position is expected to provide impetus to store addition pace (mainly from FY22E onwards). The brokerage firm revised earnings estimates upwards and build in earnings CAGR of 25 per cent in FY20-23E. It believes the near terms positives are also factored in. The stock was trading well above the brokerage firm's target price of Rs 2,765.