Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Avenue Supermarts - IPO Note - Numero Uno! - Reliance Securities

Posted On: 2017-03-07 23:14:21

Focussed on value retailing, Avenue Supermarts Ltd. (ASL) is one of the leading and most profitable supermarket chains in India with its flagship D-Mart stores. Spread over 45 cities in 9 states and 1 union territory, ASL has 117 stores as of Dec'16 covering retail business area of 3.6mn square feet. In the past few years, ASL has reported phenomenal growth with its net revenues, EBITDA and net profit increasing at 40%, 49% and 52% CAGR, respectively through FY12-16. ASL is coming out with an Initial Public Offering (IPO) of Rs18.7bn, which would be mainly utilised towards repayment/prepayment of borrowings and construction/purchase of fit outs for new stores.

Strong Focus on Value Retailing

ASL aggressively pursues the strategy of EDLC (Every Day Low Cost)/EDLP (Every Day Low Price). On the one hand, this strategy is based on offering low prices to consumers on everyday basis (EDLP) rather than on promotional basis, while on the other hand, keeping the procurement and operational cost at the minimum level (EDLC). ASL's customer acquisition/retention strategy is targeted at lower-middle, middle and aspiring upper-middle income level consumers.

Cluster-based Approach for Store Expansion

ASL follows the cluster-based strategy for expanding its retail footprint. It focuses on strengthening its presence in existing regions by opening new stores within a radius of few kilometres of existing stores. This enables ASL to have a better understanding of local needs and preferences resulting in a tailored offering to the consumers. Further, this strategy also benefits ASL in terms of achieving higher economies of scale through better supply chain management, inventory management and brand visibility.

Solid Footprint Expansion Predominantly through Ownership Model

Initially concentrating on Western and Southern India, the company has more than doubled its store count from 55 stores in FY12 to 117 stores in 9MFY17. Unlike other players, ASL pursues the ownership model for its stores which enables it to keep the fixed cost under control. Apart from rental savings, the ownership model provides the Company with a long-term competitive advantage over its peers.

Outlook & Valuation

ASL has delivered strong performance in the past few years with average Same Store Sales (SSS) growth of 24.4% from FY12-16 along with four-fold growth in revenues and more than five-fold growth in net profit during the same period. Its revenues and net profit stood at Rs87.8bn and Rs3.9bn with the highest ever EBITDA margins of 8.6% in 9MFY17. Based on annualised 9MFY17 numbers, the stock is available at an attractive valuation of 1.6x sales and 36.3x earnings. Considering the strong management bandwidth, high operating efficiency and superior financial performance coupled with attractive valuations, we strongly recommend SUBSCRIBE to the issue.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Minda Industries (MNDA.IN) - Robust performance - CSEC Research
Karur Vysya bank (KVB IN) - Moderate loan growth, coupled with deteriorating asset quality - CSEC Research
Aksharchem India Ltd - REDUCE - TP Rs.680 - Result Update - Kotak
Voltamp Ltd - BUY - TP Rs.1248 - Result Update - Kotak
Shankara Building Products Ltd - BUY - TP Rs.1654 - Result Update - Kotak
Simplex Infrastructure Ltd - BUY - TP Rs.590 - Result Update - Kotak
MOIL Ltd - ACCUMULATE - TP Rs.265 - Result Update - Kotak
CHHOTA (to) MOTA ideas: Eveready Industries Ltd - BUY - TP Rs.522 - Kotak
Castrol India Ltd - Q2FY18 Result Update - Religare
Minda Corporation - Q2FY18 Result Update - Religare
Mold-Tek Packaging - Q2FY18 Result Update - Religare
The India Cements Ltd - BUY - TP Rs.223 - Result Update - Kotak
Tata Motors - BUY - TP Rs.514 - Result Update - Kotak
Ashok Leyland - ACCUMULATE - TP Rs.126 - Result Update - Kotak
Oil India Ltd - ACCUMULATE - TP Rs.381 - Result Update - Kotak
Sun TV Network - REDUCE - TP Rs.878 - Result Update - Kotak
Larsen & Toubro - ACCUMULATE - TP Rs.1337 - Result Update - Kotak
Voltas - ACCUMULATE - TP Rs.610 - Result Update - Kotak
Allcargo Logistics - BUY - TP Rs.205 - Result Update - Kotak
Mahindra & Mahindra - BUY - TP Rs.1604 - Result Update - Kotak
Motherson Sumi Systems Ltd - SELL - TP Rs.342 - Result Update - Kotak
MRPL - ACCUMULATE - TP Rs.138 - Result Update - Kotak
Mold-Tek Packaging - ACCUMULATE - TP Rs.337 - Result Update - Kotak
NMDC Ltd - REDUCE - TP Rs.130 - Result Update - Kotak
Time Technoplast Ltd - BUY - TP Rs.214 - Result Update - Kotak
Nagarjuna Construction - BUY - TP Rs.107 - Result Update - Kotak
The Phoenix Mills Ltd - BUY - TP Rs.594 - Result Update - Kotak
Sterling Tools Ltd - BUY - TP Rs.350 - Result Update - Kotak
Delhi takes a giant stride towards curbing vehicular pollution: Angel Broking
Mirza International - REDUCE - TP Rs.173 - Result Update - Kotak
Indraprastha Gas - SELL - TP Rs.291 - Result Update - Kotak
Mahanagar Gas Ltd - SELL - TP Rs.1033 - Result Update - Kotak
Petronet LNG - ACCUMULATE - TP Rs.285 - Result Update - Kotak
Bajaj Electricals - SELL - TP Rs.335 - Result Update - Kotak
Chhota (to) Mota Ideas - Venky's India Ltd - BUY - TP Rs.3000 - Result Update - Kotak
Va Tech Wabag - BUY - TP Rs.711 - Result Update - Kotak
Chennai Petroleum Corporation Ltd - ACCUMULATE - TP Rs.485 - Result Update - Kotak
Castrol India Ltd - ACCUMULATE - TP Rs.437 - Result Update - Kotak
Shree Cements Ltd - BUY - TP Rs.21913 - Result Update - Kotak
Greenply Industries Ltd - ACCUMULATE - TP Rs.322 - Result Update - Kotak
IRB Infrastructure Developers Ltd - BUY - TP Rs.271 - Result Update - Kotak
Maharashtra Seamless Ltd - BUY - TP Rs.560 - Result Update - Kotak
VIP Industries - ACCUMULATE - TP Rs.325 - Result Update - Kotak
Greaves Cotton Ltd - ACCUMULATE - TP Rs.136 - Result Update - Kotak
Shipping Corporation of India Ltd - ACCUMULATE - TP Rs.110 - Result Update - Kotak
Berger Paints Ltd - REDUCE - TP Rs.265 - Result Update - Kotak
Apollo Tyres Ltd - BUY - TP Rs.278 - Result Update - Kotak
Zensar Technologies Ltd - REDUCE - TP Rs.855 - Result Update - Kotak
VRL Logistics - BUY - TP Rs.450 - Result Update - Kotak
Carborundum Universal Ltd (CUMI) - SELL - TP Rs.318 - Result Update - Kotak


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017