Avenue Supermarts hits 5% upper circuit, surpasses Nestle India in m-cap

With Rs 1.59 trillion m-cap, the DMart retail chain operator Avenue Supermarts now stands at the eleventh position in the overall m-cap ranking.

The market capitalisation (m-cap) of Avenue Supermarts, which runs the DMart chain of stores, crossed the packaged consumer goods company Nestle India on Wednesday.

At 02:26 pm, shares of Avenue Supermarts were locked in the upper circuit of 5 per cent at Rs 2,453, with m-cap standing at Rs 1.59 trillion on the BSE. A combined around 375,000 shares changed hands and there were pending buy orders for 13,500 shares on the NSE and BSE. In comparison, Nestle India was up nearly 1 per cent at Rs 16,305, with the m-cap of Rs 1.57 trillion, data shows.

In the past one year, the stock of Avenue Supermarts has rallied 87 per cent, as compared to 22 per cent decline in the S&P BSE Sensex. The stock is trading close to its all-time high level of Rs 2,559 touched on February 13, 2020.

The DMart retail chain operator Avenue Supermarts is now ranked at the eleventh position in the overall market-cap ranking. The company’s m-cap is now higher than the country's other large-cap companies, including State Bank of India (SBI), Bajaj Finance, Asian Paints, HCL Technologies, Larsen & Toubro, Maruti Suzuki, Wipro, Sun Pharmaceutical Industries, Axis Bank and UltraTech Cement.

Avenue Supermarkets is one of the largest supermarket stores in India. It is known for selling low on budget and high on choices products ranging from kitchen deliverables to electronics and furniture decor. Amid this lockdown, it has taken a step further. It will deliver essential commodities at the doorstep of buyers via its app.

The Centre on Sunday, May 17, extended the lockdown for two more weeks till May 31, but gave some major relaxations, permitting almost all economic activities and significant public movement.

DMart last month had announced that 50 per cent of its outlets were shut due to the Covid-19 lockdown. The company’s essential segments constitute 70 per cent of its revenues, while the balance 30 per cent revenues come from non-essential product sales.

DMart had a healthy balance sheet with a lean net working capital cycle of 26 days and RoCE of 17 per cent in FY19. It recently raised Rs 4,000 crore, which should keep it in good stead at a time when cash is king. This could potentially aid the company garner better deals for new properties; however, in the near term, the pace of store addition may get derailed, Motilal Oswal Securities said in a recent report.

The board of directors of the Company is scheduled to meet on Saturday, May 23, 2020 to consider and approve the standalone and consolidated audited financial statements for the quarter and fiscal year ended March 31, 2020.