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Informist, Friday, Oct. 10, 2025

 

By Sunil Raghu

 

AHMEDABAD – The opening of eight new stores during the September quarter, which took the total count of stores to 432, is expected to help retailer Avenue Supermarts Ltd. post decent revenue growth in the quarter. However, like the past several quarters, the company is likely to continue to face headwinds from e-commerce and quick commerce portals, which are likely to affect sales to some extent, brokerages cautioned.

 

Avenue Supermarts' net profit is expected to rise 2.4% on year to around INR 7.3 billion for the September quarter, according to the average of estimates by five brokerages. The revenue in the quarter is seen at INR 165.1 billion, up 17.5% on year. Sequentially, analysts estimate the profit to fall 12.3%, and revenue to rise 3.6%, according to the average of estimates.

 

The company, in a disclosure on Oct. 3, said its revenue for the reporting quarter was INR 162.19 billion, up 15% on year. This missed the average of brokerages' estimates by INR 2.9 billion.

 

As of Sept. 30, the company had a total of 432 stores, including the one at Navi Mumbai in Maharashtra, which is currently closed due to reconstruction, Avenue Supermarts said.

 

Avenue Supermarts will declare its September quarter results Saturday.

 

The estimates on net profit range from INR 7.0 billion by Kotak Institutional Equities to INR 7.7 billion by JM Financial Institutional Securities Pvt. Ltd. The revenue estimates range from INR 162.2 billion by

Nuvama Wealth Management Ltd. and JM Financial to INR 167.2 billion by Anand Rathi Share and Stock Brokers Ltd.

 

Avenue Supermarts is expected to report earnings before interest, tax, depreciation, and amortisation of INR 12.1 billion in the September quarter, according to the average of estimates from four brokerages. The highest estimate for EBITDA is INR 12.4 billion by Prabhudas Lilladher and the lowest is INR 11.9 billion by Kotak Institutional Equities.

 

Avenue Supermarts reported a net profit of INR 7.1 billion a year ago and INR 8.3 billion a quarter ago. The company's revenue was INR 140.5 billion in Jul-Sept last year and INR 159.3 billion in Apr-Jun. 

 

JM Financial said the company's revenue grew 15% on year on account of the new store additions. It said that DMart's sales per square foot, the commonly used metric in the retail industry to assess the financial performance of a company, is expected to grow 1% on year to INR 36,400 annualised.  

 

The brokerages seem to be on the same page with regard to the EBITDA margin for Avenue Supermarts. Kotak expects the retail major's EBITDA margin to fall 50 basis points on year, while JM Financial expects it to contract 30 basis points. Both have pointed to higher wage costs and a rise in other expenses due to increased competition. The brokerages also expect the retail firm's gross margins to fall by about 20 basis points on-year to 14.7% in the September quarter. They also anticipate margin pressure due to inventory corrections resulting from recent changes in goods and services tax rates.

 

Of the eight research reports on the company available with Informist, three have a ‘buy' or equivalent rating on the stock with an average target price of INR 4,152 per share. Another three reports have a 'hold' rating with an average target price of INR 4,179 per share and two have a ‘sell' rating with an average price of INR 3,783 per share.

 

Friday, shares of the company ended 0.4% higher at INR 4,320.40 on the National Stock Exchange. The stock has risen nearly 7% since it announced its June quarter earnings.

 

The following are the Jul-Sept earnings estimates for Avenue Supermarts based on reports from five brokerages in descending order of the estimate of net profit (in INR million): 

 

Brokerage	Net Sales (in INR million)	Net Profit (in INR million)	EBITDA (in INR million)
JM Financial Institutional Securities Pvt. Ltd.	162,188	7,659	12,339
Nuvama Wealth Management Ltd.	162,188	7,471	12,013
Anand Rathi Share and Stock Brokers Ltd.	167,204	7,125	--
Prabhudas Lilladher Pvt Ltd	166,978	7,104	12,356
Kotak Institutional Equities	166,797	7,020	11,886
Average	165,071.00	7,275.80	12,148.50

 

 

End

 

Edited by Saji George Titus

 

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