Avenue Supermart: a compounding machine?


(suhagpatel) #307

Script was listed on March 21, 2017. Not sure if every IPO has investors with one year lock in period but if that is the case here, we may see some selling pressure coming around March end considering the multi-fold returns given in one year.

Regards,
Suhag


(rahulshares) #308

Personally, Im holding this beautiful business alloted to me in IPO. Post 1 year i.e. 21st March, Ill be selling out dmart as it will be categorized as LTCG and shall be eligible for capital gains exemption. I belive its extremely overpriced and doesnt provide comfort. And the downside trigger could be promoters selling stake to comply with 75pc minimum holding requirement. Currently they hold 82pc.


(msahani) #309

It looks like grocery pick-up points may a scalable model being adopted by mature US grocers to combat Amazon. Reminds me of D’mart Ready collection centers in Mumbai. 50 Nos. now in a span of 1 year.

https://www.forbes.com/sites/deborahweinswig/2018/03/01/online-grocery-set-to-boom-in-2018-as-amazon-acknowledges-online-grocery-a-tough-market-to-crack/#3874053520b9


(msahani) #310

(brijwanth) #311

Dmart seems to be borrowing around Rs. 632 Cr. (Term Loan of 482 cr. and working capital of Rs. 150 Cr). Please find attached CRISIL report which mentioned the same DMART Crisil Report


(msahani) #312

It’s HDFC’s turn to follow GS. Target price of 1550. Markets can stay irrational longer than you can stay patient. :grinning:


(subodhs) #314

Hi, would it be a bad idea/event for a promoter to sell stake for the purpose of regulatory compliance? Wondering as there are other bad reasons for stake selling by promoters.


(Yatharth) #315

To sell a beautiful business just for 5-8% of current value to save on LTCG?


(rahulshares) #316

It makes sense to exit now and re-enter again at lower levels.

This is one of the few stocks which is trading at prices higher than the 31st Jan levels.


(Gary) #317

Is there a firm basis to your comment on quality with BB. I experimented with their easy day saving model after being away from BB for many years and I find that new merchandise is significantly better in quality and much higher priced. In fact it’s the price and lack of non future consumer choices that irks me now. But certainly not quality. This is personal experience and may not be applicable for others.

Disc- investment in future consumer only.


(thecroc) #318

My comment is loosely based on this - own experience in big bazaar and amazon reviews had commonality for the product range in Tasty Treat and Golden Harvest.


(msahani) #319

With revenue growth slowing down and accumulated losses mounting to $3.6 bn., the road ahead is certainly challenging for domestic pure play e-commerce companies.


(atul1082) #320

Just to add my experience on BB, EASY DAY AND D MART.I noted that big Bazar appeared to be the worst in quality with lot of Los quality Pvt levels, easy day ok but not economical rather costlier than a wholesale kirana shops and D Mart to be the best though limited outlets.


(RamanTiwari) #321

“This is not a business that’s going away anywhere — it’s not fastest-finger-first, where if you capture the market first, you win. In any country, retail is 30-35 per cent of its GDP. I don’t think any retailer thinks of saturation. On the granular level, even in a city like Greater Bombay where we have several stores now, we could get to 75-100 stores and still see opportunities. This is an industry that has headroom for growth for 40-50 years in India. You only have to run your business well”

This summarizes the reasons for market excitement: if a retailer get its act right (which is very very tough) growth is abundant. It has 150 stores in India and the CEO is talking of 75-100 stores in Bombay itself in future(and may be a similar number in NCR). And this is a business which can grow in smaller cities too(every Budget conscious home likes cheaper groceries). So large is the opportunity size on which they are sitting on.

Disc: invested, highest allocation to portfolio


(Value Seeker) #322

In times of market excitement everything looks good. It is when things go south that the lens of clarity gets focus :).


(msahani) #323

The CEO of Past Group is desperately trying to market his firm in the hope that a global retailer will pick up a stake.


(msahani) #324

(msahani) #325

Another TP from JM Financial


(msahani) #326

Anyone having copy of JMF report released today can please share?


(Saravanan B) #327

If the story does not play out, it will hurt investors badly.