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Avenue Supermarts share rose 8% despite weak Q2 earnings, here's why

Avenue Supermarts share touched an intraday high of Rs 2141.05, gaining 7.94% on BSE

twitter-logoBusinessToday.In | October 19, 2020 | Updated 18:15 IST
Avenue Supermarts share rose 8% despite weak Q2 earnings, here's why
Avenue Supermarts stock stands higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

Share price of Avenue Supermarts, the operator of D-Mart stores, ended over 5% higher today despite the firm reporting a 38% year-on-year fall in net profit for quarter ended September 2020. The rise in stock was helped by a continuous improvement in sales since August this year.

The stock has gained 6.19% in the last 3 days. The stock touched an intraday high of Rs 2141.05, gaining 7.94%. The share stands higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages. The stock has gained 8.92% in one year and risen 14% since the beginning of this year.

Total 1.22 lakh shares changed hands amounting to turnover of Rs  25.23 crore on BSE.

Market cap of the firm rose to Rs 1.35 lakh crore on BSE.

Avenue Supermarts reported a 38.39 per cent fall in consolidated net profit at Rs 199 crore in September quarter against profit of Rs 323 crore in the same quarter of last year. Consolidated total revenue for the quarter declined 11.43 per cent YoY to Rs 5,306 crore from Rs 5,991 crore in the year-ago quarter.

However, the pandemic-hit company showed improvement in its earnings performance on a quarter on quarter basis. In fact, it reported a constant rise in sales since July this year minimising the impact of pandemic on its business this year.

"Month-on-month sales have improved during this quarter. August was better than July and September was better than August," CEO & MD Neville Noronha was quoted as saying in a media report.

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This led the company report a 36.65% rise in sales on a sequential basis in Q2 of the current fiscal.   Sales rose to Rs 5306 crore in Q2 against Rs 3,883 crore in Q1 of current fiscal.

Net profit climbed a staggering 395% on a quarter-on-quarter basis.  It rose to  Rs 198.55 crore in Q2 against Rs 40.09 crore profit in  Q1 of current fiscal.

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