Avenue Supermarts declines 5% as Q4 EBITDA margin contracts 68 bps YoY

Analysts at Prabhudas Lilladhar believe D-Mart has higher weakness risk in 1HFY21 given that Covid-19 sensitive clusters of Maharashtra, Gujarat and Telangana constitute 63 per cent of total stores

Shares of Avenue Supermarts, the D-Mart retail chain operator, skid 5 per cent in the early morning trade to Rs 2,282 on the BSE on Tuesday on profit booking after the company’s January-March quarter (Q4FY20) results disappointed investors on the margin front. Earnings before interest, tax, depreciation and amortization (EBITDA) margin contracted 68 basis points to 6.67 per cent in Q4FY20 from 7.35 per cent in Q4FY19, hit by higher depreciation and employee costs.

In the past six months, the stock has outperformed the market by gaining 30 per cent, as compared to a 25 per cent decline in the S&P