DMart is a one-stop supermarket chain that aims to offer customers a wide range of basic home and personal products under one roof. Each DMart store stocks home utility products - including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and more - available at competitive prices. Founded by Radhakishan Damani and his family, they launched the first store in Powai in 2002. From thereon DMart today has a well-established presence in 121 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh and NCR. The supermarket chain of DMart stores is owned and operated by Avenue Supermarts Ltd. (ASL). The company has its headquarters in Mumbai. The brands D Mart, D Mart Minimax, D Mart Premia, D Homes, Dutch Harbour, etc are brands owned by ASL.
Avenue Supermarts Ltd. is a clear case of The Great Expectations. The company has over the years built a profitable retail business in an otherwise struggling retail sector. Its mantra is to play in the EDLC (Everyday Low Cost)/EDLP (Everyday Low Price) space and target value customers. The total bills cut have seen a 25%+ CAGR growth over the last 5 years and a like to like sales growth (24 months) of 20%+ over the last 5 years. The company has steadly improved operating margins from 5% to 8%+ over the last 5 years. The company is creating strides in its space. Grounded on value principles of it founder Mr. Damani, Avenue Supermarts has created its own space in the Indian retail space. At the offer price band of Rs295-299/- the company is commanding a PE of ~37x, Mcap/sales of ~1.5x and EV/EBIDTA of ~20x on its FY17 annualised financials. We believe the company is well poised for growth in the future and expect it to continue to outperform the sector peers. We advise investors to SUBSCRIBE to the issue.
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