Avenue Supermarts shares jump over 4% after CLSA initiates buy
CLSA in a brokerage note said that the private labels under the brand are rising and should drive the next leg of share gains. The company offers the lowest consumer prices due to the lowest operating cost in its view. The $500 billion addressable market is less than 5% organised.
Shares of jumped 4.4% on Thursday to hit their 52-week high of Rs 4,238 on the NSE after Hong Kong-based brokerage initiated coverage on the operator with a buy rating for a price target of Rs 5,107. With today's rally, the stock has witnessed an interrupted rally over the last four sessions and risen over 8%.CLSA in a brokerage note said that the private labels under the brand are rising and should drive the next leg of share gains. The company offers the lowest consumer prices due to the lowest operating cost in its view. The $500 billion addressable market is less than 5% organised.
The stock has been out of action in 2024, delivering under 3% returns on a net basis. Its one-year returns of 24% are also lower than 28% returns given by Nifty during this period.
Reacting to the development, analyst Sanjiv Bhasin told ET Now that IIFL was playing more now on the rural income picks and Avenue Supermarts has got more heft in tier II, tier III cities which is a "very-very big positive". The IIFL Director said that he has a buy view on this counter, however, he continues to be overweight on Jio Retail.
The Radhakishan Damani-owned company reported strong numbers for the quarter ended December, with the consolidated net profit rising 17% year-on-year (YoY) to Rs 690.61 crore. Consolidated revenue from operations at Rs 13,572.47 crore increased by more than 17% from the year-ago period.
Earnings before interest, taxes, depreciation and amortization or EBITDA during the quarter grew by 16% YoY to Rs 1,119.89 crore. However, operating margin dipped marginally to 8.25% from 8.34% a year ago.
The total expenses during the quarter, including finance costs, were Rs 12,656.46 crore, compared to Rs 10,789 crore a year ago. Staff expenses rose to Rs 234.31 crore from Rs 192.31 crore a year ago.
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Source: Stocks-Markets-Economic Times
