DMart shares down 38% from record high, what should investors do?
DMart share price today: DMart shares, which hit an all-time high of Rs 5,899.90 on October 18, 2021, were trading at Rs 3633 on November 1, 2023.
- Nov 1, 2023,
- Updated Nov 1, 2023 12:44 PM IST
Shares of Radhakishan Damani led-DMart (listed as Avenue Supermarts) are trading 38% lower from their record high. The retail stock, which hit an all-time high of Rs 5,899.90 on October 18, 2021 was trading at Rs 3633 on November 1, 2023. DMart shares ended at all-time closing high of Rs 5329.65 on October 14, 2021.
Meanwhile, the stock is also trading 16% lower to its 52-week high of Rs 4348 on BSE. In the current trading session, DMart stock was trading 0.14% higher at Rs 3638 against the previous close of Rs 3632.80 on BSE.
In the previous trading session, DMart stock ended flat at Rs 3632.80.
DMart shares have lost 16 per cent in a year and fallen 11 per cent since the beginning of this year. Total 1630 shares of the firm changed hands amounting to a turnover of Rs 59.41 lakh on Wednesday. Market cap of the firm rose to Rs 2.36 lakh crore. The share hit a 52-week low of Rs 3292.65 on March 16, 2023.
The stock has a one-year beta of 0.6, indicating low volatility during the period.
In terms of technicals, the relative strength index (RSI) of DMart stock stands at 38.9, signaling neither the stock is overbought nor oversold. Avenue Supermarts shares are trading lower than the 5-day, 20-day, 50-day, 100-day but higher than the 200-day moving averages.
The PE ratio of DMart stands at 101 signaling the stock is overvalued compared to its industry. The PE of the retail industry stands at 90.72.
In the second quarter of the current fiscal, Avenue Supermarts reported a 9.09 per cent fall in its net profit to Rs 623.35 crore against a net profit of Rs 685.71 crore in the year-ago period.
Avenue Supermarts reported a 18.66 percent year-on-year increase in consolidated revenue at Rs 12,624.37 crore in Q2 compared to Rs 10,638.33 crore in the same period last year. Revenue climbed 6.39 percent from Rs 11,865.44 crore in the previous quarter.
Standalone revenue climbed 25 per cent to Rs 11,305 crore as compared to Rs 9,065 crore in the same period a year ago.
Centrum Broking expects DMart shares to hit a target of Rs 5006 in year. Post its Q2 earnings in mid-October, the brokerage said, “We adjust our EPS estimate for FY24/25 by -6/-12% each respectively. We roll forward our estimates to FY26. We maintain BUY rating valuing the stock at 80x 1HFY26EPS estimates to arrive at a target price of Rs 5,006.”
Axis Securities assigned a hold rating post Q2 earnings with a target of Rs 4,000 from Rs 3,870 per share earlier.
“We maintain HOLD outlook on the stock (Unchanged from the earlier stance). We have changed our FY25E PAT estimates by 4% to factor in near-term demand normalisation in FY25,” the brokerage said.
Listing out the risks the retailer faces in the near term, Axis said, “DMart is likely to struggle in improving its overall store matrix in the near term as –a) Delayed recovery in general merchandise sales has continued to impact the margins over the last several quarters, b) Larger and newer stores have been struggling to improve their store matrix as this stores have higher gestation periods, thus impacting the overall profitability, c) Increasing competition from organised players (Reliance, Star Bazzar, Zudio) as they penetrate in smaller towns.”
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Shares of Radhakishan Damani led-DMart (listed as Avenue Supermarts) are trading 38% lower from their record high. The retail stock, which hit an all-time high of Rs 5,899.90 on October 18, 2021 was trading at Rs 3633 on November 1, 2023. DMart shares ended at all-time closing high of Rs 5329.65 on October 14, 2021.
Meanwhile, the stock is also trading 16% lower to its 52-week high of Rs 4348 on BSE. In the current trading session, DMart stock was trading 0.14% higher at Rs 3638 against the previous close of Rs 3632.80 on BSE.
In the previous trading session, DMart stock ended flat at Rs 3632.80.
DMart shares have lost 16 per cent in a year and fallen 11 per cent since the beginning of this year. Total 1630 shares of the firm changed hands amounting to a turnover of Rs 59.41 lakh on Wednesday. Market cap of the firm rose to Rs 2.36 lakh crore. The share hit a 52-week low of Rs 3292.65 on March 16, 2023.
The stock has a one-year beta of 0.6, indicating low volatility during the period.
In terms of technicals, the relative strength index (RSI) of DMart stock stands at 38.9, signaling neither the stock is overbought nor oversold. Avenue Supermarts shares are trading lower than the 5-day, 20-day, 50-day, 100-day but higher than the 200-day moving averages.
The PE ratio of DMart stands at 101 signaling the stock is overvalued compared to its industry. The PE of the retail industry stands at 90.72.
In the second quarter of the current fiscal, Avenue Supermarts reported a 9.09 per cent fall in its net profit to Rs 623.35 crore against a net profit of Rs 685.71 crore in the year-ago period.
Avenue Supermarts reported a 18.66 percent year-on-year increase in consolidated revenue at Rs 12,624.37 crore in Q2 compared to Rs 10,638.33 crore in the same period last year. Revenue climbed 6.39 percent from Rs 11,865.44 crore in the previous quarter.
Standalone revenue climbed 25 per cent to Rs 11,305 crore as compared to Rs 9,065 crore in the same period a year ago.
Centrum Broking expects DMart shares to hit a target of Rs 5006 in year. Post its Q2 earnings in mid-October, the brokerage said, “We adjust our EPS estimate for FY24/25 by -6/-12% each respectively. We roll forward our estimates to FY26. We maintain BUY rating valuing the stock at 80x 1HFY26EPS estimates to arrive at a target price of Rs 5,006.”
Axis Securities assigned a hold rating post Q2 earnings with a target of Rs 4,000 from Rs 3,870 per share earlier.
“We maintain HOLD outlook on the stock (Unchanged from the earlier stance). We have changed our FY25E PAT estimates by 4% to factor in near-term demand normalisation in FY25,” the brokerage said.
Listing out the risks the retailer faces in the near term, Axis said, “DMart is likely to struggle in improving its overall store matrix in the near term as –a) Delayed recovery in general merchandise sales has continued to impact the margins over the last several quarters, b) Larger and newer stores have been struggling to improve their store matrix as this stores have higher gestation periods, thus impacting the overall profitability, c) Increasing competition from organised players (Reliance, Star Bazzar, Zudio) as they penetrate in smaller towns.”
Also read: Balu Forge shares: Ashish Kacholia's multibagger stock rises 18% after Q2 results
Also read: Adani Wilmar Q2 loss at Rs 131 crore; stock down 2%