DMart, Tata Consumer, Asian Paints, IGL from BSE200 index hit 52-week lows

Adani Energy and Adani Wilmar from the BSE200 index have hit their respective 52-week lows after Gautam Adani and others were charged by US prosecutors for allegedly bribing Indian officials

Shares of Avenue Supermarts (DMart), Tata Consumer Products, Asian Paints, Indraprastha Gas (IGL), Bandhan Bank and IndusInd Bank from the BSE200 index have hit their respective 52-week lows, falling around 4 per cent each on the BSE in Thursday’s intra-day trade. 

 

Adani Group stocks Adani Energy Solutions (down 20 per cent at Rs 697.70) and Adani Wilmar (10 per cent at Rs 294.40), which are also a part of the BSE200 index, have hit their 52-week lows after Gautam Adani, along with others, were formally charged by US prosecutors for allegedly bribing ($250 million) Indian officials.

 

At 01:42 PM, the BSE 200 index was down 0.8 per cent, as compared to the 0.59 per cent decline in the BSE Sensex.

 

 

Among the individual stocks, Avenue Supermarts,which owns and operates the retail chain DMart, has slipped 3.6 per cent to Rs 3,617.80 in intra-day trade today. The stock has fallen below its previous low of Rs 3,645.65 touched on January 24, 2024. 

 

Thus far in the month of November, the market price of DMart has fallen 8 per cent after the company’s September quarter (Q2F25) results missed street expectations due to lower store productivity. The like-for-like (LFL) growth fell to 5.5 per cent year-on-year (YoY), considerably  down from 9.1 per cent in Q1FY25, resulting in an H1FY25 LFL growth of 7.4 per cent.

 

This quarter marked the lowest revenue growth ever recorded for the company at just 14 per cent YoY.  Additionally, footfalls (bill cuts) declined by 1 per cent quarter-on-quarter, compared to a 4 per cent increase in the same period last year. Revenue throughput per store remained flat YoY, although the retail expansion rate held steady at 14 per cent YoY.

 

The rise of online grocery formats, especially in large metro cities which operate at a very high revenue per sq.ft, has caused a moderation in the topline growth, according to analysts at Geojit Financial Services. The brokerage firm expects demand to improve in H2FY25 given the ongoing festive season. DMart has strong growth potential given its healthy balance sheet with no debt and strong operational efficiency. Strong store additions will aid future revenue growth, while lower inflation will improve discretionary demand and margins, analysts said.

 

Meanwhile, shares of IGL hit a fresh 52-week low of Rs 306.50, down 4 per cent in intra-day trade today. In one week, the stock price of the city gas distribution (CGD) company has tanked 27 per cent after the central government further reduced the administered price mechanism (APM) allocation of domestic gas to the company. This is expected to have an adverse impact on the profitability of gas distribution companies. 

 

IGL, in an exchange filing on November 15, said that based on a communication received by the company from GAIL (India) -- the nodal agency for domestic gas allocation -- there has been a further reduction in domestic gas allocation to the company effective from November 16, 2024.

 

The revised domestic gas allocation to the company is approximately 20 per cent lesser than the previous allocation, which will have an adverse impact on profitability of the company, IGL said. The company further said that it gets domestic gas allocation for meeting the requirement of CNG sales volumes at the pricing fixed by the government (presently at $6.5/mmbtu). The company is exploring all options to address the issue, it added.

 

As per Elara Securities (India) sensitivity analysis, every Rs 1/scm decline in CNG margin would hit IGL’s FY26E EBITDA by 7 per cent as the brokerage firm assumes lower long-term earnings before interest, tax, depreciation, and amortisation (Ebitda)/scm margin of Rs 5.7 for IGL (from Rs 6.7). It downgraded IGL to 'Sell' (from Accumulate).

 

Shares of Asian Paints also hit a fresh 52-week low of Rs 2,428.25, down 2 per cent in intra-day trade today. Thus far in the month of November, the stock has declined 17 per cent as the company reported a weak set of numbers for Q2FY25. The company's Ebitda margin declined to 15.5 per cent from 20.3 per cent in the corresponding period of the previous year.

 

In Q2FY25, the company’s consolidated net sales decreased by 5.3 per cent YoY to Rs 8,003 crore as its decorative business in India registered a volume decline of 0.5 per cent. Weak consumer sentiment coupled with persistent rains through the quarter and floods in some parts of the country also impacted consumption.

 

Asian Paints’ Q2FY25 conference call did not provide any comfort, regarding guidance on recovery in sales growth in the near-term. The management did acknowledge the impact of competition, which got aggravated due to slower industry demand.  Contrary to competitors, Asian Paints remains cautious on growth. Analysts at Elara Securities (India) anticipate further market share erosion and believe investors should not catch a falling knife as the industry is going through structural changes.