Avenue Supermarts falls 4% post Q4 results

Avenue Supermarts , which operates the chain of D-Mart stores, has dipped 4% to Rs 1,433 on the market on profit booking despite the company reported a 72.9% year-on-year (y-o-y) growth in its net profit to Rs 1.67 billion in the fourth quarter of FY18. Total Revenue during the period was up 22.4% y-o-y to Rs 38.10 billion.
Analysts on an average had expected profit of Rs 1.86 billion on revenue of Rs 37.77 billion for the quarter.

The company’s EBITDA (earnings before interest, tax, depreciation and amortization) margin improved 100 bps from 6.7% in Q4FY17 to 7.7% in Q4FY18.

Motilal Oswal Securities had expected net profit growth of 82% and revenue growth of 125% y-o-y for the quarter. The broker firm Prabhudas Lilladher expected EBITDA margin improvement of 230bps to 9%.

Like for like growth of Avenue Supermarts has declined from 21.2% in FY17 to 14.2% in FY18.

“FY18 SSS growth at 14.2% (vs. 21.2% in FY17) was impacted by price deflation across staples, change in tax rates post GST (c3% impact in our view) and adverse base due to demonetization,” analysts at IIFL Institutional Equities said in result update.