Company Update : Avenue Supermarts By JM Financial Services
Pressure on revenue growth sustains
* Q1FY26 revenue up ~16% YoY to ~INR 159 bn (1% lower vs. initial estimate): Q1FY26 revenue growth grew 16% YoY (vs 17/18% YoY growth in Q4/Q3FY25) to INR 159 bn. We note revenue growth was 1% below our initial estimate and 2% below consensus estimates.
* Store addition largely in line with expectation; 9 stores added QoQ: Dmart added 9 stores on a QoQ basis (largely in line vs our initial estimate of 10 stores in Q1), taking the store count to 424 in Q1FY26. Assuming a new store area of ~41,000 sq ft, it added ~0.4 mn sq ft QoQ in Q1, taking the EOP total selling space to ~17.6 mn sq ft.
* Sales/sq ft up 2% YoY: Based on our selling space assumptions, estimated sales/sq ft was up 2% YoY (lower than 3% growth in Q4FY25) to ~INR 9.2k/sq ft and is still 1% below vs. Q1FY20.
* We estimate ~10%/7% YoY EBITDA/PAT growth in Q1: We estimate a ~40 bps YoY dip in EBITDA margin to 8.5% in Q1FY26, despite expectations of flat gross margin, largely on account of higher operating cost. Overall, we expect 10% YoY growth in EBITDA to INR 13.5 bn. Based on our selling area estimates, we expect EBITDA/sq ft of ~INR 776, down 3% YoY despite 2% increase in sales/ sq ft due to 8-10% increase in staff and other expenses per sq ft. We expect PAT to grow 7% YoY to INR 8.7 bn largely on account of increase in depreciation expenses and lower other income.
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SEBI Registration Number is INM000010361
