In D-Mart shopping cart, valuations look justified
In a sector where companies are struggling to generate consistent profits, Avenue Supermarts is an outlier. The company, which runs India's most profitable supermarket chain under the D-Mart brand, has reported net profits that have grown in each of the last five financial years going back to FY2012. If one were to annualise the reported net profit for nine months of FY17, it is well on its way to topping the Rs 500 crore mark for the fiscal. A consistent track record of profitability, a strong management team and an obsession with keeping costs to the minimum is the best medicine to keep profits rolling going ahead. Retail investors can subscribe to the issue.At the lower end of the price band, the company is asking for 35 times its FY17 annualised net profit on a post issue equity base. While this is at a slight premium to Future Retail (34.2 times FY17 earnings), it is justified given that Future's FY17 estimated revenues are 60 per cent more while its net profit is 35 per cent...02-03-2017