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Avenue Super.Q1 FY24

Avenue Super. Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3,688P/E: 78.7Market Cap: ₹2.4L CrSector: Retailing

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3
  • The company emphasizes seizing the large growth opportunity in India by adding more stores steadily.
  • Management's philosophy is to perform better every year in terms of store additions, although specific guidance on store count is not provided.
  • As of March 2023, the company had 324 stores and continues expansion with plans to open new stores each year.
  • Internal profits are being reinvested for growth rather than paying dividends, aiming for long-term benefits.
  • The focus is on balancing growth with maintaining operational efficiency and profitability.
  • The online business (DMart Ready) is expanding cautiously, with increasing confidence each year, aiming to scale up for profitability.
  • The company pursues a cluster-based expansion strategy targeting both large and small towns, aiming for gradual penetration.

See what Avenue Super. management said on margin guidance — free account, 30 seconds.

Fundraise plans

Based on the AGM transcript from the provided pages: - There is no specific mention of any current or planned fundraising through debt or equity. - The company emphasizes strong internal accruals being reinvested into growth, such as store expansion. - The focus remains on organic growth by opening new stores and reinvesting profits rather than seeking external funding. - Dividend is not being paid currently as internal profits are utilized for expansion. - No guidance or discussion on raising funds externally via equity or debt is indicated in the Q&A or speech sections. Thus, as per the latest AGM, Avenue Supermarts Limited is not currently pursuing or announcing any new debt or equity fundraising plans.

See what Avenue Super. management said on order book — free account, 30 seconds.

Capex plans

Yes
  • The company is focused on growth by adding more stores, aiming to be better or at least maintain the past performance in store additions.
  • As of March 2023, there are 324 stores, and the management intends to continue expanding the store network.
  • All internal profits are being reinvested to add more stores rather than paying dividends, indicating ongoing capital expenditure.
  • Specific guidance on the number of new stores or exact CapEx is not provided, but a cluster-based expansion strategy is followed targeting large and small towns.
  • The company is gradually penetrating new markets with a cluster-based approach and is focused on scaling operations.
  • The management is also investing in eco-friendly initiatives and green building certifications as part of sustainable CapEx.
  • Online business (DMart Ready) is being developed carefully and measuredly, with a view toward future scale and profitability.

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Margin guidance

Category 3
  • Avenue Supermarts aims to grow by adding more stores, leveraging India's large market opportunity.
  • Internal profits are being reinvested to fund store expansion, rather than paying dividends currently.
  • The management does not provide specific store addition guidance but strives to outperform past growth annually.
  • Operating margin is stable around 7-7.5%, with a focus on maintaining gross margins around 15%.
  • The company emphasizes building talent and operational efficiency to support growth and profitability.
  • DMart Ready (online business) is growing cautiously; profitability is expected only after achieving significant scale and improving gross margins.
  • While margins are considered sacrosanct, PAT depends on operational efficiency and market forces.
  • Overall, the company is in a strong position financially and prioritizes long-term growth over immediate earnings or dividend payouts.

Order book

The provided transcript and document pages from Avenue Supermarts Limited's 23rd Annual General Meeting do not contain any information regarding the current or expected order book or any pending orders for the company. The discussion primarily covers: - Total number of stores (324 as of March 2023) - Strategy and profitability concerns related to DMart Ready (online business) - Financial performance and operational margins - Shareholder questions on dividends, store expansion, and e-commerce plans - E-voting and meeting procedural details No details on order book size, value, or pending orders are mentioned in the provided content.

How does Avenue Super. rank vs peers in Retailing?

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