D-Mart parent hits Rs1 trillion market cap

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DMart shares fall most since listing after Q3 results

Mumbai: Shares of D-Mart parent, Avenue Supermarts Ltd on Monday joined the elite club of companies that have seen their market capitalisation soar past Rs1 trillion on the exchanges.

In morning trade, the firm saw its market capitalisation touch Rs100,320 crore with its shares trading at a record high of Rs1,619.95, up 1.68% from previous close, showed data from BSE.

However, the stock erased most of the gains and failed to hold Rs1 trillion m-cap. At closing, the script was at Rs1593.80, up 0.05% and its market cap stood at Rs99,466.59 crore.

The stock gained 19% in last three weeks. So far this year it has gained 34%. The script has jumped 433% from its offer price of Rs299 since its debut in March 2017.

Last week, the company informed exchanges that its promoter Radhakishan Damani sold nearly 6.2 million shares or 1% stake to ensure that the firm meets the minimum public shareholding norms.

Recently, the company also included in the MSCI India Domestic and MSCI India Domestic Small Cap Index with effect from 1 June.

For March quarter, the company posted a net profit of Rs167 crore, up 73% from a year ago. Total revenue rose 22.5% from a year ago to Rs3,810 crore.

“D’Mart has a strong track record of high growth and profitability in all of its performance matrices. We expect high growth to continue aided by store additions, change in strategy, e-com, debt reduction and tailwinds from GST. As a result we expect high premium to be maintain in the medium-term,” said brokerage firm Geojit.

D-mart added 24 stores during the financial tear 2018 which is the highest number of stores additions in a year since 2012 however remained lower than management’s internal expectations of 30. Management has cited store addition as one of the key challenges and focus areas for the company.

“We now factor in 25 store openings/year (20 earlier) and increase our EPS estimates by 1% for FY19 and 4% for FY20. We estimate 32% EBIDTA and 33% PAT CAGR over FY18-20. We believe that valuations at 66.8xFY20 EPS factor in the positives,” said Prabhudas Lilladher in a report to its investors. The brokerage firm has retained its reduce ratings with a target price of Rs1,003 a share.

Of the 15 brokers tracking the D-Mart stock on Bloomberg, as many as 5 recommended a ‘buy’ rating, 8 asked its investors to ‘sell’ the stock and 2 have a ‘hold’ rating.livemint