Avenue Supermarts (AVEU.NS): Metro SSG Stalls as QC Pressure Intensifies; Maintain Sell

研报英文原文证据摘录

Avenue Supermarts (AVEU.NS): Metro SSG Stalls as QC Pressure Intensifies; Maintain Sell

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12 Jul 2026 17:34:26 ET │ 19 pages

Avenue Supermarts (AVEU.NS)

Metro SSG Stalls as QC Pressure Intensifies; Maintain Sell

CITI'S TAKE

SSG moderated to 5.5% (vs 10.8%/5.6%/6.8%/7.1% in 4Q/3Q/2Q/1Q)

leading to revenue/EPS growth of 15%/13% YoY (4%/9% below Citi est).

Management highlighted flat SSG for older stores in large metro cities Sell

(stores in non-metros continue to grow well) while GM&A mix improved by Price (10 Jul 26 15:30) Rs4,081.10

74bps – we believe this is predominantly led by QC competition and partly

due to reversal of 4Q pantry stocking. DMart Ready discontinued Target price Rs3,400.00↓

operations in 7 cities (now present in 11 cities) leading to subsidiaries from Rs3,650.00

revenue growth slowing to 5% YoY (16-20% growth in last 4qtrs) while loss Expected share price return -16.7%grew 32% YoY to Rs753mn. Profit growth has lagged revenue growth in 10

out of last 13 qtrs led by QC competition, lower other income and higher Expected dividend yield 0.0%

interest expense. We cut FY27-29E revenue est by 4-6%, EPS est by 5-7% Expected total return -16.7%

and roll forward DCF to June’28E (from Mar’28E). Maintain Sell with Market Cap Rs2,661,881MRs3,400 TP (Rs3,650 earlier) implying 53x FY 28E P/E.

US$28,220M

Other highlights — (a) In large metros, growth in older stores which have

significantly higher revenue per sq ft was flat while stores in non-metros continue to

grow well – we believe this also led to improvement in general merchandize and

apparel (GM&A) mix since GM&A revenue share is higher in smaller/non-metro Price Performance

towns. (b) DMart Ready discontinued operations in 7 cities (now present in 11 cities) (RIC: AVEU.NS, BB: DMART IN)