Buy Avenue Supermarts Ltd For Target Rs.5,300 By Motilal Oswal Financial Services Ltd
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Revenue growth inches up to 17.5% YoY (vs est. ~15% YoY and ~14% YoY in 2Q)
*DMART reported standalone revenue growth of 17.5% YoY to INR156b (vs our estimate of ~15% YoY growth), driven by 13% YoY store addition and likely high single-digit SSSG. After a relatively weaker 2Q, the revenue growth recovered to the 17-20% YoY range.
*The company added 10 stores during the quarter (vs 12 stores added in 1H), bringing the count to 387 stores.
*Productivity improved:
*Annualized revenue/store is back on track with +4% YoY growth to INR1.63b (vs modest 1% YoY growth in 2Q).
*Annualized revenue/sq ft (calc) was also up ~3% YoY on our estimate to INR38.8k/sq ft (vs flat YoY in 2Q).
*Ramp-up in store additions remains the key growth driver for DMART. We are building in ~18 store additions in 4Q, which would bring the total store additions to 40 in FY25.
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