Avenue Supermarts – Long Runway To Growth: Prabhudas Lilladher

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Prabhudas Lilladher Report

We believe Avenue Supermarts Ltd. will gain significantly in FY23 from throughput in stores opened during Covid. We remain confident that the company’s strategy of ‘Everyday Low Prices’ will push sales during current high inflation scenario and will attract the middle-class to organised retail from unorganised retail.

With a strong balance sheet and the efficient execution capability of the management, we expect sustained growth in coming years. We are positive on DMart Ready as sales double in FY22 (Rs 1.4 billion in FY19 to Rs 16.6 billion in FY22), operations extend in 12 cities and pick-up points increase to 519.

Management seems more confident of the scalability of this format, we expect it to achieve sales of Rs 54 billion with Ebitda breakeven in FY25.

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