PORTFOLIO UPDATE!!
1] AVENUE SUPERMART
Topline growth and bottom line growth was very impressive. I strongly believe given the inflationary pressure on the all the FMCG products, consumers are making smart decisions and trying to find better price opportunities. This helps a company like Dmart since its economies of scale help them to offer attractive prices to consumers. So an inflationary environment has helped Dmart in some ways. In their presentation, the management talked about highest ever Bill Value but the footfalls are below the prepandemic levels. So basically, less consumers are spending so much more that the total sales are higher than the prepandemic levels. Imagine if the footfalls normalise in coming months, it will lead to a huge push in their earnings. Some segments that have suffered are discretionary spending and Apparels segment. These will normalize once the inflation eases. Also in their earnings call, I would like to find out the growth in Dmart’s E-commerce segment and its share in the total revenue.
With 2 consecutive quarters of 10000cr revenue, we can safely assume this performance to sustain and with 5% NPM, my estimated pat comes at 2000cr on 40000cr revenue. So at avg 140PE valuations, the stock price comes at 4450rs. This is a very conservative approach.
Their current quarter NPM is at 6%, so my highly optimistic estimate is 5350rs per share.
Holding this stock and looking to buy more.
2] HDFC BANK
After a good 3 quarters, HDFC Bank has announced amazing results. NII has grown by an impressive 18% and the loan growth has come at 23% with deposit growth at 19%. Many are of the opinion that, next quarter is going to be tough for banks, but for now HDFC Bank has given a nice start for the earnings season of banks.
Will hold this till next quarter results.
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