INSUBCONTINENT EXCLUSIVE:
shares in Avenue Supermarts, roughly a 2.2 per cent stake
He joined D-Mart in January 2004 as head of operations and later got promoted as CEO in 2007 and MD CEO in 2011.
The company went public in
March 2017 and last week the stock hit a fresh record high of Rs 1,516
At this price, the stock was up 407 per cent from its issue price of Rs 299 and enjoyed an m-cap of over Rs 94,000 crore.
Some brokerages
have raised the red flag on the stock, saying it has gone up too much, too fast.
If Avenue does manage to cross the Rs 1,00,000 crore mark,
it would be only the 30th firm on BSE to have crossed that limit at prevailing price.
Rarest of profitable retailersBrokerage Edelweiss
Securities calls Avenue one among the rarest of profitable retailers
Parent firm D-Mart has successfully created a strong business moat and a unique business model.
The firm has an efficient store format, good
product mix and strong back-end distribution and packing centres, and has managed to sustain a low-cost structure
The company has managed to grow operating cash flow and RoCE despite rapid store expansion.
The company is expected to report over 20 per
sourcing as well as improving efficiencies, we expect Ebitda margins to improve by 250 bps YoY
Avenue is scheduled to report fourth quarter earnings on May 5
Damani opened his first retail store in Powai in 2002
When Noronha joined D-Mart in 2004, the company had three operational stores
Today, it boasts of a 141-store network with a retail business area of 4.4 million square feet.
Noronha brought eight years of experience
with Hindustan Unilever (HUL), where he looked after sales, market research and modern trade
He was account manager for modern trade when he left HUL.
From building the team from the early days to acquiring and setting up of stores
in new territories, he has played a key role in the D-Mart journey
Noronha is over two decades old in the consumer goods industry
In February 2016, he was reappointed as MD of Avenue Supermarts for five years up to January 31, 2021.
A science graduate from SIES College
of Arts, Science and Commerce in Mumbai, Noronha also hold a postgraduate degree in marketing management from Narsee Monjee Institute of
Management Studies.
Stock is pricey, says D-StreetThe company has been performing quarter after quarter, but the speed at which the stock
has grown has begun to raise eyebrows
Some analysts say the stock valuation worries them.
The prevailing valuation factors in an ideal scenario of strong, double-digit same-store
sale (SSS) growth with sustained improvement in margins for a long term, which, in a grocery retail, is difficult, says Jefferies.
The
The stock traded at Rs 1,490 on Friday, almost 1 per cent below its all-time high
Prabhudas Lilladher has a 'reduce' rating, with a price target of Rs 1,469
