Radhakishan Damani Portfolio Stock Avenue Supermarts Sees 15% Rise in Q2 FY26: What Investors Should Know
Avenue Supermarts, the retail arm of Radhakishan Damani, has reported a 15.5% rise in revenue for the second quarter of FY26, with revenue reaching Rs 16,676.30 crore. The company’s Ebitda also saw an 11% increase, reaching Rs 1,213.65 crore, while net profit rose 4% to Rs 685.01 crore.
Key Highlights of Avenue Supermarts’ Q2 FY26 Results
The company’s operating margin remained flat at 7.3%, despite a surge in wages for entry-level positions. The margin contraction is expected to persist due to sustained competition in the FMCG segment and product shifts. Avenue Supermarts added eight new stores during the quarter, taking the total store count to 432, with a capital work-in-progress of Rs 1,500 crore, indicating potentially robust store additions over the next six months.
Nuvama Wealth Management has raised the target price for Avenue Supermarts to Rs 4,580 apiece, implying a 6% upside from the current levels. However, the brokerage has cut revenue estimates for FY26 and FY27 by 0.8% and 1.7%, respectively, and profit estimates by 6.6% and 3.6%, respectively.
DMart Ready’s Growth and Expansion Plans
DMart Ready, the company’s e-commerce arm, saw a 16% year-on-year growth, although this is lower than the previous 20% trend. The company has added 10 new fulfillment centers in existing markets and continues to invest in strengthening its presence across major metro cities. However, the widening loss in subsidiaries is a concern, stemming from a higher proportion of ‘delivery sales’ compared to pickup sales.
During the quarter, Avenue Supermarts ceased operations in five cities, according to Nuvama Wealth Management. The company’s focus on expanding its store count and strengthening its e-commerce presence is expected to drive growth in the long term.
What Investors Should Know
For investors looking to invest in Avenue Supermarts, it’s essential to consider the company’s growth prospects, competitive landscape, and valuation. The stock has been a consistent performer, and the recent results indicate a positive outlook. However, investors should also be aware of the potential risks, including margin contraction and competition in the FMCG segment.
To stay updated on the latest stock market news and trends, investors can follow reputable sources and financial news websites. It’s also crucial to conduct thorough research and consult with financial advisors before making any investment decisions.
Conclusion
In conclusion, Avenue Supermarts’ Q2 FY26 results indicate a positive outlook for the company, with revenue and profit growth driven by store expansions and e-commerce initiatives. While there are concerns regarding margin contraction and competition, the company’s focus on growth and expansion is expected to drive long-term success. Investors should stay informed and consider their investment options carefully, taking into account the company’s growth prospects, competitive landscape, and valuation.
