Why Avenue Supermarts Ltd. (DMart) IPO deserves a record listing – Yash Dave

DMart came into existence in some year which only augur’s little relevance to this analytical opinion.

Coming straight to the facts & figures before forming basis to a range bound conclusion.

  • Follows ownership model of business similar to global giant Walmart.
  • PE at 33, FY 17 Vs industry PE of 179.
  • Promoter holding at 82% (approximate) after share allotment.

Comparison of Supermarts Avenue with its closest peer V-mart retail ltd 

Revenue CAGR of 40% Vs 30%.

Operating profit margins at 7.9% Vs 7.6%.

Annual Revenue (FY 17) at Rs 25,844 crores Vs Rs 9849 crores.

ROE at 21.1% Vs 17%.

Net profit (CAGR) at 52% Vs 27%.

Asset T/O at 3.9 times Vs 6.55 times

Inventory T/O at 14.18 times Vs 4.11 times

  •    Out of total issue size :
  1.  35% is open for Retail allotment
  2. 50% for QIBs
  3. Rest 15% for institutional buyers.

Conclusion : To the blogger the data seems to suggest that an upper price band of Rs 299 per share is comparatively cheap. Hence, it’s a definite buy with an modest target of Rs 350, moderate target of Rs 399 & an aggressive price target of Rs 480.

For questions, suggestions, opinions & queries please comment.

Disclaimer : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.

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Published by

Yash Dave

A student of Charted Financial Analyst (USA) & MBA Finance. My interests are mainly in the field of equity research. Keep updated for further research material.

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