Avenue Supermarts hits valuation hurdle, stock at 124 times FY23 earnings

Margin disappointment weighs on stock, which has gained 47% in 3 months

After hitting its all-time high intraday, the stock of retail ma­jor Avenue Supermarts (DMart) slipped over 8 per cent. This was because the margin performance was lower than the Street’s expectations, though revenue growth was strong.
 
The biggest concern, however, is its valuation, which is on the expensive side. The stock is trading at 124 times its financial year 2022-23 (FY23) earnings estimates, compared with the sector average of 65 times.
 
Analysts, like Anand Shah of Axis Capital, highlight that at the current price the stock is trading at a market capitalisation (m-cap) to store and m-cap to