Shares of Avenue Supermarts that runs the retail chain Dmart fell close to 4 per cent in early morning trade on Monday after it reported a decline in profit after 12 quarters. The shares hit the day's low of Rs 3,771.7 and then rose to Rs 3,836.60 at 10:27 am IST but continued to trade 2 per cent lower.
The company reported a 9.1 per cent year-on-year decline in net profit at Rs 623.4 crore for the quarter that ended September. The consolidated revenue also dropped by 18.7 per cent YoY to Rs 12,624 against Rs 10,638 crore during the same period in the last fiscal.
However the revenue grew 6.4 per cent sequentially from Rs 11,865 crore reported in the quarter ended June.
The company in the first half of this financial year opened 12 stores increasing its total store count to 336.
At a 107x price-to-earnings ratio, Kotak and Citi brokerages have found the company's current performance hard to justify such high prices. Both brokerages have sell ratings on the stock. Even Jefferies has retained its hold rating on the stock. However, the foreign brokerage has raised the target to Rs 3,850 from the earlier Rs 3,700.
