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Why did Avenue Supermarts Ltd share price move today?collapse benzinga

Why did Avenue Supermarts Ltd share price move today?

Avenue Supermarts shares are trading higher along with several Nifty stocks bouncing back after yesterday’s massive sell-off in broader markets.

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Shareholding Info
  • Promoters
    74.93 %
  • Foreign institutions-FII
    8.17 %
  • Other domestic institutions
    0.79 %
  • Retail and other
    9.37 %
  • Mutual Funds
    6.75 %

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Key Indices in BSE

About the Avenue Supermarts


Mr Radhakishan Damani founded the hypermarket brand DMart on May 15, 2002, with its first store in Powai, Mumbai. It is a supermarket chain that sells a wide range of basic home and personal products like food, toiletries, kitchenware, bed and bath linen, beauty products, garments, home appliances, etc. The company’s goal is to provide good quality products at competitive prices. Today, its presence has extended to 294 stores in Maharashtra, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh, Chhattisgarh, Rajasthan, National Capital Region, Tamil Nadu, Karnataka, Uttar Pradesh, Daman, and Punjab.

Core Activities & Products


A large part of DMart’s current commercial success, for which it is frequently referred to as the Walmart of India, may be attributed to the solid business strategy that it has built up over the years. It is a large, efficient, and profitable retail chain that sells food items, home products, electronics, lifestyle and beauty products, garments and all other needs under one roof. The company researches, identifies and provides new products and categories that are needed by Indian families across the country.

Board of Directors


Ramesh Damani: Chairman & Independent DirectorIgnatius Navil Noronha: Managing Director & CEORamakant Baheti: WholeTime Director & Group CFOAshu Gupta: Company Secretary And Compliance OfficerChandrashekhar Bhave: Independent DirectorDheeraj Kampani: Vice PresidentElvin Machado: Whole-Time DirectorHitesh Shah: Vice PresidentKalpana Unadkat: Independent DirectorManjri Chandak: Non Executive DirectorNarayanan Bhaskaran: Chief Operating OfficerNiladri Deb: Chief Financial Officer

Management Team


  • Shri Nehal Vora: Managing Director & Chief Executive Officer
  • Shri Amit Mahajan: Chief Technology Officer
  • Smt Nayana Ovalekar: Chief Regulatory Officer
  • Shri Girish Amesara: Chief Financial Officer
  • Shri Ramkumar K.: Chief of Business and Operations

Presence


The company is present across India in 10 states, a union territory and the NCR, including Maharashtra, Gujarat, Daman, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Punjab and Rajasthan. It is present in roughly 294 locations in the country.

Registered Office:


Anjaneya Chs Ltd Orchard Avenue,
Powai,
Mumbai,
Maharashtra - 400076
India 

Strengths:


The strengths of the company that have affected the DMart share price are:
  1. Reduced Operational Costs and Expenditures: DMart favours efficient space usage. The company's strategy for cutting operational expenses is to provide customers with a greater variety of products in fewer locations, which is often referred to as a low-interior-cost approach. Additionally, you will see fewer billing counters when you enter a DMart store, which helps to further cut personnel costs.
  2. Affordable Product Prices: In the FMCG industry, it is typical to see merchants repay the credit to vendors over three weeks, but DMart repays credit within a week. The corporation gains from this in numerous ways, including the significant discounts they receive from the vendors, which are also highly advantageous for the end consumers.
  3. Sales Route: As already stated, DMart chooses the B2C (Business to Consumer) business model, in which it sells goods to customers directly from manufacturers. By making bulk purchases of its products, the company cuts out distributors and wholesalers from the supply chain, allowing it to pass on the savings from its commissions to customers.
  4. Focus on the Long-Term: Since Damani, the company's creator, is an investor, the business has only ever been concerned with long-term goals and objectives. Due to this, the business now uses a value-driven pricing strategy to maximize returns.
  5. Scaling Up Slowly: DMart got off on a very low note and gradually worked its way up the scale. This improved the company's ability to manage its bottom line and provided a deeper grip on its supply chain.
  6. Management with a Focus on People: DMart has excellent employee policies in place and is very open about its employee interactions. They also get along well with customers, suppliers, and other stakeholders.
  7. Discount Program: DMart's generous discount policy is one thing that sets it apart from its chief rival Reliance. The shop has gained market share by selling necessities at a fixed discount price that few rivals can match.
  8. Clear Price-Based Differentiation: DMart has never adopted the set trends in the industry and has always believed in disrupting the market by providing competitive pricing and discount policy.

CSR and Sustainability


DMart believes in corporate and social responsibility and has always been devoted to giving back to the communities in which they operate. They are conscious of the requirement and significance of social responsibility while also being highly focused on sustainable economic performance. Following are some CSR projects:
  • Development Sustainability in the Environment (2020-21): Cost of the project: INR 0.57 Cr. Through grants to the Isha Outreach River Program and contributions to the Bommasandra Industrial Association, the company made a CSR contribution to environmental sustainability development.
  • Relief Activities for COVID-19 (2020-21): Cost of the Project: INR 2.29 Cr. The project sector is water and sanitation, and preventive healthcare. By funding COVID-19 relief efforts through grocery distribution, the company has supported CSR.
  • Program for Nutrition and Healthcare (2020-21): This was done to take steps for the eradication of hunger, poverty, and malnutrition. The company funded a programme to promote a good diet and health.


Criticism


The company has not received much criticism in its many years of working. But some are critical of the fact that it has a very limited share in the market due to the intense competition. They also have a very limited presence in Southern India and no presence in Central India despite being established 20 years ago.

COVID-19 Impact


Just like all major companies, DMart was adversely affected. Due to major disruptions in its store operations starting in March 2020, its revenues slid dramatically. As the fear of the pandemic diminished and sales increased over the past two quarters, DMart also has had to deal with the problem of over inventory.

Future Prospects


The prospects of the company look good in the share market. In the last five years, the shares have increased by 320%, and 17% in the last quarter. The stock has taken support levels at its 200-EMA, and indicators including MACD and RSI are indicating bullish trends and positive momentum. Experts in the field have recommended buying the share for the medium-long term.

Did You Know!


DMart gives an average of 6% of discount on the maximum retail price of all products. The aim of the company has always been to provide consumer goods at low prices. Damani has always believed in such simplicity which can be seen in the simple decor of the stores and his own appearances, as he wears only white shirts and white trousers, which is why he is called 'Mr White and White'. He also keeps a low profile and has hardly ever given an interview to a TV channel or a newspaper.

Initial Public Offering


Avenue Supermarts Ltd. is the owner and operator of D-Mart, with its headquarters in Mumbai (ASL). Avenue Supermarts Ltd. established a record opening on the National Stock Exchange following theIPO posting(NSE). Its IPO opened on March 8 2017 until March 10 2017 and was subscribed 104.48 times. After the stock market closed on March 22, 2017, the value of D-Mart increased to Rs. 39,988 crores. The main-board IPO has 62,541,806 equity shares with a face value of Rs. 10 aggregating up to Rs. 1,870.00 Crores. It was listed on the NSE and BSE.

Equity Shares


As per many experts, the prospects look good. The company added 38 stores in FY20, up from 21 in FY19. DMart boasts of having large stores as well as having the highest revenue per square foot in the industry. DMart owns almost 90% of the properties on which its stores are built, so there are no rental overheads. DMart has a loyal vendor base because the company pays their invoices well in time (7-10 days), unlike the competition. All these factors put them in a strong position to expand and diversify in the years to come. After experiencing a sharp increase in July when the stock grew over 24% in July, and more than in the month of August, indicates that there are bullish trends for the stock for the new few months.

Annual Financial Summary


BALANCE SHEET OF AVENUE SUPERMARTS (in Rs. Cr.)

MAR 22

MAR 21

MAR 20

MAR 19

MAR 18

12 mths

12 mths

12 mths

12 mths

12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital

647.77

647.77

647.77

624.08

624.08

TOTAL SHARE CAPITAL

647.77

647.77

647.77

624.08

624.08

Reserves and Surplus

13,276.34

11,657.51

10,487.75

4,970.40

4,018.63

TOTAL RESERVES AND SURPLUS

13,276.34

11,657.51

10,487.75

4,970.40

4,018.63

TOTAL SHAREHOLDERS FUNDS

13,924.11

12,305.28

11,135.52

5,594.48

4,642.71

NON-CURRENT LIABILITIES

Long Term Borrowings

0.00

0.00

0.00

125.67

246.00

Deferred Tax Liabilities [Net]

64.84

51.90

48.20

64.07

46.30

Other Long Term Liabilities

320.72

217.36

178.60

0.78

0.78

Long Term Provisions

0.00

0.00

0.00

0.00

0.00

TOTAL NON-CURRENT LIABILITIES

385.56

269.26

226.80

190.52

293.07

CURRENT LIABILITIES

Short Term Borrowings

0.00

0.00

3.73

299.15

7.25

Trade Payables

531.21

565.54

445.97

458.28

315.88

Other Current Liabilities

529.69

484.11

257.78

442.47

341.70

Short Term Provisions

33.39

22.20

14.33

12.67

11.85

TOTAL CURRENT LIABILITIES

1,094.29

1,071.85

721.81

1,212.57

676.68

TOTAL CAPITAL AND LIABILITIES

15,403.96

13,646.39

12,084.13

6,997.57

5,612.47

ASSETS

NON-CURRENT ASSETS

Tangible Assets

8,723.10

6,619.90

5,707.69

4,205.86

3,233.65

Intangible Assets

9.52

9.45

11.19

10.27

6.20

Capital Work-In-Progress

1,073.14

1,006.21

361.94

376.55

147.05

Other Assets

96.11

91.49

16.53

18.10

16.33

FIXED ASSETS

9,901.87

7,727.05

6,097.35

4,610.78

3,403.23

Non-Current Investments

532.31

402.30

287.30

212.00

129.50

Deferred Tax Assets [Net]

0.00

0.00

0.00

0.00

0.00

Long Term Loans And Advances

0.00

0.00

0.00

0.00

0.00

Other Non-Current Assets

1,618.64

1,556.15

3,407.21

145.74

133.33

TOTAL NON-CURRENT ASSETS

12,052.82

9,685.50

9,791.86

4,968.52

3,666.07

CURRENT ASSETS

Current Investments

0.00

0.00

0.00

0.00

51.70

Inventories

2,586.89

2,167.33

1,909.43

1,576.22

1,147.04

Trade Receivables

230.86

72.10

48.53

75.52

33.36

Cash And Cash Equivalents

284.31

1,431.99

92.24

213.55

556.46

Short Term Loans And Advances

0.00

0.00

0.00

0.00

0.00

OtherCurrentAssets

249.08

289.47

242.07

163.76

157.84

TOTAL CURRENT ASSETS

3,351.14

3,960.89

2,292.27

2,029.05

1,946.40

TOTAL ASSETS

15,403.96

13,646.39

12,084.13

6,997.57

5,612.47

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities

2,696.61

2,827.97

2,207.02

1,583.58

0.00

CIF VALUE OF IMPORTS

Raw Materials

0.00

0.00

0.00

0.00

0.00

Stores, Spares And Loose Tools

0.00

0.00

0.00

0.00

0.00

Trade/Other Goods

0.00

0.00

0.00

0.00

0.00

Capital Goods

0.00

0.00

0.00

0.00

0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency

633.38

440.45

626.27

650.29

401.06

REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign Currency

--

--

--

--

--

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods

--

--

--

--

--

Other Earnings

0.97

0.01

5.04

5.98

--

BONUS DETAILS

Bonus Equity Share Capital

--

--

--

--

--

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value

--

--

--

--

--

Non-Current Investments Unquoted Book Value

--

--

--

--

129.50

CURRENT INVESTMENTS

Current Investments Quoted Market Value

--

--

--

--

--

Current Investments Unquoted Book Value

--

--

--

--

51.70

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