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Avenue Supermarts DCF Valuation

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268 views12 pages

Avenue Supermarts DCF Valuation

Uploaded by

Jeetu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Disclaimer - Not a Recommendation

Company Overview
Avenue Supermarts Ltd.
About the company:
Avenue Supermarts Limited (DMart) is a national
Recommendation : XXX INR
supermarket chain, with a focus on value-retailing. We CMP : 4,287
offer a wide range of products with a focus on Foods, Target Price : XXXX
Non-Foods (FMCG) and General Merchandise
& Apparel product categories. Stock Data (as on May 31, 2024)
NIFTY : 22547.8
52 Weeks H/L (INR) : 4924/3437
Store Network: Market Cap (INR Crs) : 2,79,955
As of Dec,23 Co. operates 366 stores across 22 cities Outstanding Shares (Crs) : 65.07
and one union territory with an 11.8 million square ft Dividend Yield (%) : 0.00%
retail business area. AVL has its highest presence in NSE Code : DMART
Maharashtra with 103 stores and followed by Gujarat
Relative Stock Performance - 1Y
with 57 stores and Telangana with 36 stores.

Revenue breakup H1FY24:


Food : 56%
Non-Foods (FMCG) : 21%
General Merchandise & Apparel : 23%

Revenue from Sales per Retail Business Area sq ft


FY20 : Rs. 32,879
FY23 : Rs. 31,096

Increasing competition from E-retail


With the advent of the pandemic, E-retail has made
Stock Price CAGR
its mark with the Indian consumer's Amazon pantry
1 Year : 22%
and Jio mart has established its presence in major
3 Years : 12%
cities and the competition is increasing.
5 Years : 26%
The company incurred capital expenditure of over Rs
1,300 crore in fiscal 2021 and increased retail space Shareholding Pattern (as on Mar 2024)
to 8.8 million sq ft (which further increased to 10.3 Promoters : 74.64%
million sq ft as of December 31, 2021) from 7.8 FIIs : 8.26%
million sq ft. DIIs : 8.51%
Government : 0.06%
Raising of funds Public : 8.50%
Avenue Supermarts raised 4098 Cr via QIP at an issue
price of Rs. 2,049 on 11th February, 2020. The funds Pros:
raised will be used for future expansion and partial 1. The company is almost debt-free.
repayment of the existing debts.
2. The company has delivered good profit
Subsidiaries: growth of 23.2% CAGR over last 5 years
As of FY23, Company has 5 subsidiaries:
1 Align Retail Trades Pvt. Ltd. (ARTPL) Cons:
2 Avenue Food Plaza Pvt. Ltd. (AFPPL) 1. Though the company is reporting repeated
3 Avenue E- commerce Ltd. (AEL) profits, it is not paying out dividend
4 Nahar Seth & Jogani Developers Pvt. Ltd. (NSJDPL)
5 Reflect Healthcare And Retail Pvt. Ltd.(RHRPL)
Yash Anand
Source: Screener.in
Key Product Categories

Cluster Based Expansion Strategy


Year Wise Store Addition

FY20: Avenue supermarts added 38 news stores bringing the total count to
214 stores

FY21: 22 new stores were opened, with 2 existing stores converted into
fulfillment centres, totally in 234 stores

FY22: the company's significant growth with 50 new stores reaching a total
of 284 stores

FY23: there were 40 new stores added, and one location was reconverted
from a fulfillment Centre to a DMart store, making a total 324 stores

FY24: Avenue supermarts added 41 new stores, bringing the total store
count to 365
Operating and Financial Summary

Total Bills Cut: Increased from 20.1 Crores in FY20 to 30.3 Crores in
FY24.

Like For Like Growth: Highest in FY23 (24.2%), lowest in FY21 (-13.1%).

Retail Business Area: Expanded from 7.8 Mn Sq. Ft. in FY20 to 15.1 Mn Sq.
Ft. in FY24.

Revenue from Sales per Sq. Ft.: Highest in FY24 (INR 32,941), lowest in FY21
(INR 27,306).
Operating and Financial Summary (Cont’d)

Revenue from Operations: Consistently increased from INR 24,675 Crores


in FY20 to INR 49,533 Crores in FY24.

EBITDA: Lowest in FY21 (INR 1,742 Crores, 7.3%), highest in FY24 (INR 4,099
Crores, 8.3%).

PAT: Lowest in FY21 (INR 1,165 Crores, 4.9%), highest in FY24 (INR 2,695
Crores, 5.4%).

Net Cash Flow from Operations: Consistently increased from INR 1,674
Crores in FY20 to INR 3,343 Crores in FY24.
Operating and Financial Summary (Cont’d)

Days Inventory & Days Payables


Days Inventory has shown a decreasing trend from FY20 (30.4 days) to FY23 (28.8 days) with a
slight increase in FY24 (29.2 days).
Days Payables slightly decreased from FY20 (7.9 days) to FY23 (6.3 days) but increased to 7.1
days in FY24.

Debt and Equity


Total Debt has fluctuated, starting at INR 280 Crores in FY20, increasing to INR 296 Crores in
FY21, and peaking at INR 464 Crores in FY24.
Equity has consistently grown from INR 11,156 Crores in FY20 to INR 19,281 Crores in FY24.
Debt/Equity Ratio has decreased significantly from 0.03 in FY20 to 0.02 in FY24, indicating an
improved financial leverage position.

Fixed Asset and Inventory Turnover Ratio


Fixed Asset Turnover ratio increased from 4.1 in FY20 to 3.6 in FY24, with a notable dip to 3.1 in
FY21.
Inventory Turnover Ratio shows an increase from 14.2 in FY20 to a peak of 14.8 in FY23, slightly
declining to 14.6 in FY24.

Return on Net Worth and Return on Capital Employed


Return on Net Worth (RoNW) started at 20.4% in FY20, dropped to 9.9% in FY21, and gradually
increased to 15.1% in FY24.
Return on Capital Employed (RoCE) improved from 16.1% in FY20 to 19.1% in FY24, despite a dip
to 11.5% in FY21.
Disclaimer - Not a Recommendation.
Always conduct proper due diligence before making any investment decision.

Avenue Supermarts Ltd. (DCF Valuation)

x Ticker DMART Implied Share Price 1,833.98


Date 28-05-2024 Today's Share Price 4,472.00 Implied Gain/(Loss) (41%)

x Assumptions

Valuation Assumptions
Growth Rate 11.24%
Terminal Growth Rate 7.50%
WAAC 15.15%

x Calculation of PV of FCFF Mar-24A Mar-25E Mar-26E Mar-27E Mar-28E Mar-29E


In crores
EBIT 3,373.01 3,752.10 4,173.79 4,642.87 5,164.68 5,745.13
Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
NOPAT 2,529.76 2,814.07 3,130.34 3,482.16 3,873.51 4,308.85
Less: Reinvestment Rate 58.30% 58.30% 58.30% 58.30% 58.30% 58.30%
Free Cash Flow to Firm (FCFF) 1,054.87 1,173.43 1,305.31 1,452.01 1,615.20 1,796.73
Mid Year Convention 0.5 1.5 2.5 3.5 4.5
Discounting Factor 0.932 0.809 0.703 0.610 0.530

PV of FCFF 1,093.51 1,056.35 1,020.46 985.79 952.29

x Calculation of Terminal Value

FCFF (n+1) 1,931.48


WAAC 15.15%
Terminal Growth Rate 7.50%
Terminal Value 25,243.61

x Calculation of Equity Value per Share

PV of FCFF 5,108.41
PV of Terminal Value 1,13,596.24
Enterprise Value 1,18,704.65

Add:Cash 638.18
Less:Debt -
Equity Value 1,19,342.83
No. of Shares 65.07
Equity Value per Share 1,833.98
Share Price 4,684.00
x Discount/Premium 2.55x

Yash Anand
Avenue Supermarts Ltd.

#Weighted Average Cost of Capital


All figures are in INR.

Peer Comps
Debt/ Debt/ Levered Unlevered
1 Equity Capital 2 3
Name of the Comps Country Total Debt Total Equity Tax Rate Beta Beta

Avenue Super. India 592.2 3,03,668.8 30.00% 0.20% 0.19% 0.97 0.97
Trent India 1,753.0 1,65,056.4 30.00% 1.06% 1.05% 0.97 0.96
Vedant Fashions India 10,174.8 26,845.1 30.00% 37.90% 27.48% 0.97 0.77
Aditya Bir. Fas. India 444.4 24,988.1 30.00% 1.78% 1.75% 0.97 0.96
Metro Brands India 1,059.8 30,851.8 30.00% 3.43% 3.32% 0.97 0.95

Average 30.00% 8.87% 6.76% 0.97 0.92


Median 30.00% 1.78% 1.75% 0.97 0.96

Cost of Debt Cost of Equity

Pre-Tax Cost of Debt 4 5


7.96% Risk-Free Rate 7.10%
Tax Rate 30.00% Equity Risk Premium 8.51%
5.57% 6 0.97
Post-Tax Cost of Debt Levered Beta
Cost of Equity 15.35%

Capital Structure Levered Beta

Current Target Comps Median Unlevered Beta 0.96


Total Debt 592.2 0.19% 1.75% Target Debt/Equity 1.78%
Market Capitalization 3,03,668.8 99.81% 98.25% Tax Rate 30%
Total Capital 3,04,260.9 100.00% 100.00% Levered Beta 0.97

Debt/Equity 0.20% 1.78% Weighted Average Cost of Capital

Notes: Cost of Equity 15.35%


1. Tax Rate Considered as Marginal Tax Rate for the country Equity Weight 98.25%
2. Levered Beta is based on 5 year monthly data
3. Unlevered Beta = Levered Beta/(1+(1-Tax Rate)*Debt/Equity) Cost of Debt 5.57%
4. Pre-Tax Cost of Debt = Interest Payment on Borrowing/Total Book Debt Debt Weight 1.75%
5. Risk free Rate = Government Bond rate + Default country spread.
6. Levered Beta = Unlevered Beta*(1+(1-Tax Rate)*Debt/Equity)
WAAC 15.15%

Yash Anand
Avenue Supermarts Ltd.

Yash Anand
Avenue Supermarts Ltd.

AVENUE SUPERMARTS LTD - Sales Forecasting


Year Weight Years Sales Sales Growth
1 2015A 6,439.4 REVENUE
2 2016A 8,583.8 33.30%

67,690.8
3 2017A 11,897.7

63,045.2
38.61%

58,399.6
4 2018A 15,033.2 26.35%

53,754.0
50,788.8
5 2019A 20,004.5 33.07%

49,108.4
6 2020A 24,870.2 24.32%

42,839.6
7 2021A 24,143.1 -2.92%
8 2022A 30,976.3

30,976.3
28.30%

24,870.2
9 2023A 42,839.6

24,143.1
38.30%

20,004.5
10 2024A 50,788.8 18.56%

15,033.2
11,897.7
11 2025E 49,108.4 -3.31%

8,583.8
12 2026E 53,754.0

6,439.4
9.46%
13 2027E 58,399.6 8.64%
14 2028E 63,045.2 7.95%
15 2029E 67,690.8 7.37% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

AVENUE SUPERMARTS LTD - EBITDA Forecasting


Year Weight Years EBITDA EBITDA Growth
1 2015A 456.3 EBITDA
2 2016A 664.5 45.63% 6,000.0
3 2017A 969.2 45.86%
4 2018A 1,352.9 39.59% 5,000.0
5 2019A 1,633.3 20.73%
6 2020A 2,128.3 30.31% 4,000.0
7 2021A 1,744.8 -18.02%
8 2022A 2,502.4 43.42% 3,000.0
9 2023A 3,638.8 45.41%
10 2024A 4,103.8 12.78%
2,000.0
11 2025E 4,018.9 -2.07%
12 2026E 4,400.6 9.50%
1,000.0
13 2027E 4,782.3 8.67%
14 2028E 5,164.1 7.98%
15 2029E 5,545.8 0.0
7.39%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

AVENUE SUPERMARTS LTD - Net Profit Forecasting


Year Weight Years Net Profit Net Profit Growth
1 2015A 191.4 NET PROFIT
2 2016A 303.2 58.39% 3,500.0
3 2017A 451.1 48.77%
4 2018A 718.5 59.28% 3,000.0
5 2019A 854.1 18.87%
6 2020A 1,241.0 45.29% 2,500.0
7 2021A 905.0 -27.07%
8 2022A 1,378.8 2,000.0
52.35%
9 2023A 2,250.7 63.24% 1,500.0
10 2024A 2,389.2 6.15%
11 2025E 2,368.2 -0.88% 1,000.0
12 2026E 2,604.5 9.98%
13 2027E 2,840.9 9.07% 500.0
14 2028E 3,077.2 8.32%
15 2029E 3,313.6 0.0
7.68%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Yash Anand
Avenue Supermarts Ltd.

Financial Statement - AVENUE SUPERMARTS LTD


Years Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 LTM
x
Income Statement
Sales ₹ 6,439.4 ₹ 8,583.8 ₹ 11,897.7 ₹ 15,033.2 ₹ 20,004.5 ₹ 24,870.2 ₹ 24,143.1 ₹ 30,976.3 ₹ 42,839.6 ₹ 50,788.8 ₹ 50,788.8
Sales Growth - 33.30% 38.61% 26.35% 33.07% 24.32% -2.92% 28.30% 38.30% 18.56% 0.00%

COGS ₹ 5,835.9 ₹ 7,773.2 ₹ 10,706.0 ₹ 13,413.8 ₹ 18,009.5 ₹ 22,394.3 ₹ 22,012.9 ₹ 28,028.5 ₹ 38,563.3 ₹ 44,180.7 ₹ 46,685.1
COGS % Sales 90.63% 90.56% 89.98% 89.23% 90.03% 90.04% 91.18% 90.48% 90.02% 86.99% 91.92%

Gross Profit ₹ 603.5 ₹ 810.6 ₹ 1,191.7 ₹ 1,619.4 ₹ 1,995.0 ₹ 2,475.9 ₹ 2,130.2 ₹ 2,947.8 ₹ 4,276.3 ₹ 6,608.2 ₹ 4,103.8
Gross Margins 9.37% 9.44% 10.02% 10.77% 9.97% 9.96% 8.82% 9.52% 9.98% 13.01% 8.08%

Selling & General Expenses ₹ 147.2 ₹ 146.1 ₹ 222.5 ₹ 266.6 ₹ 361.7 ₹ 347.6 ₹ 385.3 ₹ 445.5 ₹ 637.5 ₹ 2,504.4 -
S&G EXP % Sales 2.29% 1.70% 1.87% 1.77% 1.81% 1.40% 1.60% 1.44% 1.49% 4.93% 0.00%

EBITDA ₹ 456.3 ₹ 664.5 ₹ 969.2 ₹ 1,352.9 ₹ 1,633.3 ₹ 2,128.3 ₹ 1,744.8 ₹ 2,502.4 ₹ 3,638.8 ₹ 4,103.8 ₹ 4,103.8
EBITDA Margins 7.09% 7.74% 8.15% 9.00% 8.16% 8.56% 7.23% 8.08% 8.49% 8.08% 8.08%

Depreciation ₹ 81.5 ₹ 98.4 ₹ 127.8 ₹ 159.0 ₹ 212.5 ₹ 374.4 ₹ 414.2 ₹ 498.1 ₹ 638.9 ₹ 730.8 ₹ 730.8
Depreciation % Sales 1.27% 1.15% 1.07% 1.06% 1.06% 1.51% 1.72% 1.61% 1.49% 1.44% 1.44%

EBIT ₹ 374.7 ₹ 566.0 ₹ 841.4 ₹ 1,193.9 ₹ 1,420.8 ₹ 1,753.9 ₹ 1,330.7 ₹ 2,004.3 ₹ 2,999.9 ₹ 3,373.0 ₹ 3,373.0
EBIT Margins 5.82% 6.59% 7.07% 7.94% 7.10% 7.05% 5.51% 6.47% 7.00% 6.64% 6.64%

Inter est ₹ 72.4 ₹ 91.3 ₹ 122.0 ₹ 59.5 ₹ 47.2 ₹ 69.1 ₹ 41.7 ₹ 53.8 ₹ 67.4 ₹ 58.1 ₹ 58.1
Interest % Sales 1.12% 1.06% 1.03% 0.40% 0.24% 0.28% 0.17% 0.17% 0.16% 0.11% 0.11%

Earnings Before Tax ₹ 302.4 ₹ 474.7 ₹ 719.4 ₹ 1,134.3 ₹ 1,373.6 ₹ 1,684.8 ₹ 1,289.0 ₹ 1,950.5 ₹ 2,932.5 ₹ 3,314.9 ₹ 3,314.9
EBT % Sales 4.70% 5.53% 6.05% 7.55% 6.87% 6.77% 5.34% 6.30% 6.85% 6.53% 6.53%

Tax ₹ 110.9 ₹ 171.5 ₹ 268.3 ₹ 415.8 ₹ 519.5 ₹ 443.8 ₹ 384.0 ₹ 571.7 ₹ 681.8 ₹ 925.7 ₹ 925.7
Effective Tax Rate 36.68% 36.12% 37.29% 36.66% 37.82% 26.34% 29.79% 29.31% 23.25% 27.93% 27.93%

Net Profit ₹ 191.4 ₹ 303.2 ₹ 451.1 ₹ 718.5 ₹ 854.1 ₹ 1,241.0 ₹ 905.0 ₹ 1,378.8 ₹ 2,250.7 ₹ 2,389.2 ₹ 2,389.2
Net Margins 2.97% 3.53% 3.79% 4.78% 4.27% 4.99% 3.75% 4.45% 5.25% 4.70% 4.70%

No. of Equity Shares 56.15 56.15 62.41 62.41 62.41 64.78 64.78 64.78 64.83 65.07 0

Earnings per Share ₹ 3.4 ₹ 5.4 ₹ 7.2 ₹ 11.5 ₹ 13.7 ₹ 19.2 ₹ 14.0 ₹ 21.3 ₹ 34.7 ₹ 36.7 -
EPS Growth % 58.39% 33.85% 59.28% 18.87% 39.98% -27.07% 52.35% 63.12% 5.76% -100.00%

Dividend per Share - - - - - - - - - - -


Dividend Payout Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Retained Earnings 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0.00%
x
Balance Sheet
Equity Share Capital ₹ 561.5 ₹ 561.5 ₹ 624.1 ₹ 624.1 ₹ 624.1 ₹ 647.8 ₹ 647.8 ₹ 647.8 ₹ 648.3 ₹ 650.7
Reserves ₹ 637.7 ₹ 958.9 ₹ 3,217.7 ₹ 4,045.0 ₹ 4,963.4 ₹ 10,432.0 ₹ 11,535.9 ₹ 13,029.9 ₹ 15,430.4 ₹ 18,047.1
Borrowings ₹ 904.3 ₹ 1,192.3 ₹ 1,497.3 ₹ 439.3 ₹ 700.2 ₹ 333.2 ₹ 392.7 ₹ 646.9 ₹ 643.0 ₹ 592.2
Other Liabilities ₹ 251.4 ₹ 388.8 ₹ 480.2 ₹ 539.9 ₹ 717.9 ₹ 663.2 ₹ 1,078.6 ₹ 1,146.4 ₹ 1,382.8 ₹ 1,887.2
Total Liabilities ₹ 2,354.8 ₹ 3,101.6 ₹ 5,819.3 ₹ 5,648.2 ₹ 7,005.5 ₹ 12,076.2 ₹ 13,655.1 ₹ 15,471.0 ₹ 18,104.5 ₹ 21,177.2

Fixed Assets Net Block ₹ 1,528.1 ₹ 2,093.5 ₹ 2,577.8 ₹ 3,400.0 ₹ 4,400.4 ₹ 5,948.0 ₹ 7,008.8 ₹ 9,260.0 ₹ 11,340.5 ₹ 13,415.0
Capital Work in Progress ₹ 98.1 ₹ 81.7 ₹ 152.9 ₹ 147.1 ₹ 376.8 ₹ 364.4 ₹ 1,019.6 ₹ 1,129.3 ₹ 829.2 ₹ 935.2
Investments ₹ 15.2 ₹ 29.3 ₹ 25.7 ₹ 68.2 ₹ 16.5 ₹ 14.7 ₹ 3.0 ₹ 5.9 ₹ 202.2 ₹ 106.7
Other Assets ₹ 128.7 ₹ 181.8 ₹ 209.8 ₹ 275.9 ₹ 319.7 ₹ 3,674.2 ₹ 1,886.3 ₹ 1,967.6 ₹ 1,018.7 ₹ 1,988.5
Total Non-Current Assets ₹ 1,770.1 ₹ 2,386.4 ₹ 2,966.1 ₹ 3,891.1 ₹ 5,113.4 ₹ 10,001.3 ₹ 9,917.6 ₹ 12,362.9 ₹ 13,390.6 ₹ 16,445.3

Receivables ₹ 7.1 ₹ 8.4 ₹ 21.0 ₹ 33.5 ₹ 64.4 ₹ 19.6 ₹ 43.6 ₹ 66.9 ₹ 62.2 ₹ 166.4
Inventory ₹ 539.6 ₹ 671.7 ₹ 947.9 ₹ 1,163.5 ₹ 1,608.7 ₹ 1,947.4 ₹ 2,248.3 ₹ 2,742.7 ₹ 3,243.5 ₹ 3,927.3
Cash & Bank ₹ 38.0 ₹ 35.1 ₹ 1,884.3 ₹ 560.2 ₹ 219.1 ₹ 107.9 ₹ 1,445.6 ₹ 298.6 ₹ 1,408.3 ₹ 638.2
Total Current Assets ₹ 584.7 ₹ 715.2 ₹ 2,853.2 ₹ 1,757.2 ₹ 1,892.1 ₹ 2,074.8 ₹ 3,737.4 ₹ 3,108.1 ₹ 4,714.0 ₹ 4,731.9

Total Assets ₹ 2,354.8 ₹ 3,101.6 ₹ 5,819.3 ₹ 5,648.2 ₹ 7,005.5 ₹ 12,076.2 ₹ 13,655.1 ₹ 15,471.0 ₹ 18,104.5 ₹ 21,177.2
x
Cash Flow Statements

Operating Activities
Profit from operations ₹ 474.0 ₹ 666.0 ₹ 984.0 ₹ 1,375.0 ₹ 1,659.0 ₹ 2,149.0 ₹ 1,764.0 ₹ 2,515.0 ₹ 3,659.0 ₹ 4,131.0
Receivables ₹ 2.0 ( ₹1. 0) ₹ 54.0 ( ₹13. 0) ( ₹31. 0) ₹ 45.0 ( ₹24. 0) ( ₹23. 0) ₹ 5.0 ( ₹104. 0)
Inventory ( ₹161. 0) ( ₹132. 0) ( ₹276. 0) ( ₹212. 0) ( ₹445. 0) ( ₹339. 0) ( ₹301. 0) ( ₹494. 0) ( ₹501. 0) ( ₹684. 0)
Payables ( ₹4. 0) ₹ 72.0 - ₹ 55.0 ₹ 146.0 ( ₹30. 0) ₹ 145.0 ₹ 11.0 ₹ 165.0 ₹ 231.0
Loans Advances ( ₹5. 0) - - - - - - - - -
Operating investments - - ( ₹2. 0) ( ₹62. 0) ₹ 52.0 ₹ 2.0 ₹ 12.0 ( ₹3. 0) - -
Other WC items ₹ 16.0 ( ₹7. 0) ( ₹46. 0) ( ₹11. 0) ( ₹72. 0) ( ₹54. 0) ₹ 41.0 ( ₹73. 0) ₹ 12.0 ( ₹87. 0)
Working capital changes ( ₹152. 0) ( ₹69. 0) ( ₹270. 0) ( ₹243. 0) ( ₹351. 0) ( ₹376. 0) (₹127. 0) ( ( ₹582. 0) ( ₹320. 0) ( ₹644. 0)
Direct taxes ( ₹100. 0) ( ₹164. 0) ( ₹258. 0) ( ₹403. 0) ( ₹502. 0) ( ₹492. 0) ₹262. 0) ( ₹560. 0) ( ₹709. 0) ( ₹742. 0)
Cash from Operating Activity ₹ 222.0 ₹ 434.0 ₹ 456.0 ₹ 729.0 ₹ 807.0 ₹ 1,281.0 ₹ 1,375.0 ₹ 1,373.0 ₹ 2,631.0 ₹ 2,745.0

Investing Activities
Fixed assets purchased ( ₹477. 0) - ( ₹645. 0) ( ₹916. 0) ( ₹1,417. 0) ( ₹1,712. 0) ( ₹2,029. 0) ( ₹2,410. 0) ( ₹2,212. 0) ( ₹2,731. 0)
Fixed assets sold - ₹ 2.0 ₹ 10.0 ₹ 7.0 ₹ 8.0 ₹ 6.0 ₹ 2.0 ₹ 21.0 ₹ 5.0 ₹ 9.0
Investments purchased ( ₹2,901. 0) ( ₹638. 0) - - - - - - ( ₹193. 0) -
Investments sold ₹ 2,904.0 - - ₹ 1,376.0 ₹ 410.0 ₹ 232.0 ₹ 3.0 ₹ 4.0 ₹ 6.0 ₹ 123.0
Investment income - ₹ 3.0 ₹ 8.0 - - - - - - -
Interest received - ₹ 1.0 ₹ 1.0 ₹ 31.0 ₹ 36.0 ₹ 12.0 ₹ 129.0 ₹ 43.0 ₹ 39.0 ₹ 262.0
Dividends received - - - - - - - - - -
Investment in group cos - ( ₹14. 0) ( ₹21. 0) ( ₹49. 0) - - - - - -
Redemp n Canc of Shares - - - ₹ 8.0 - - - - - -
Other investing items - ₹ 14.0 ( ₹1,835. 0) ₹ 7.0 ₹ 3.0 ( ₹3,194. 0) ₹ 786.0 ₹ 1,054.0 ₹ 42.0 ( ₹131. 0)
Cash from Investing Activites (₹474.0) (₹632.0) (₹2,482.0) ₹ 464.0 (₹960.0) (₹4,656.0) (₹1,109.0) (₹1,288.0) (₹2,313.0) (₹2,468.0)

Financing Activity
Proceeds from shares ₹ 33.0 - ₹ 1,841.0 - - ₹ 110.0 - - ₹ 15.0 ₹ 75.0
Proceeds from debentures ₹ 200.0 ₹ 350.0 ₹ 250.0 - - ₹ 300.0 - - - -
Redemption of debentures - - - ( ₹384. 0) ( ₹170. 0) ( ₹512. 0) ( ₹34. 0) - - -
Proceeds from borrowings ₹ 295.0 ( ₹60. 0) ₹ 260.0 - ₹ 992.0 ₹ 1,100.0 ₹ 200.0 ₹ 248.0 - -
Repayment of borrowings ( ₹232. 0) - ( ₹155.0) ( ₹695. 0) ( ₹562. 0) ( ₹1,550. 0) ( ₹204. 0) ( ₹248. 0) - -
Interest paid fin ( ₹62. 0) ( ₹93. 0) ( ₹120. 0) ( ₹80. 0) ( ₹51. 0) ( ₹98. 0) ( ₹44. 0) ( ₹54. 0) ( ₹67. 0) ( ₹58. 0)
Financial liabilities - - - - - ( ₹70. 0) ( ₹98. 0) ( ₹125. 0) ( ₹153. 0) ( ₹329. 0)
Application money refund - - - - - - - - ₹ 1.0 -
Other financing items - - ( ₹50. 0) - - ₹ 4,077.0 - - - ₹ 164.0

Net Cash Flow (₹18.0) (₹1.0) - ₹ 34.0 ₹ 56.0 (₹18.0) ₹ 86.0 (₹94.0) ₹ 114.0 ₹ 129.0

Yash Anand
DCF Valuation Summary for
Avenue Supermarts (DMart)
Overview
Avenue Supermarts, the parent company of DMart, is a prominent
player in the Indian retail sector, known for its large network of
hypermarkets. A Discounted Cash Flow (DCF) valuation model was
developed to estimate the intrinsic value of Avenue Supermarts'
stock, providing insights into its current market valuation.

Key Findings
Current Market Price: Rs. 4,472 (28/05/24)
Implied Share Price (DCF Valuation): Rs. 1,833.98
Market Premium: The stock is trading at a premium of 2.55x
compared to its implied intrinsic value.

Conclusion
The DCF model indicates that the intrinsic value of Avenue
Supermarts' share is Rs. 1,833.98. However, the current market
price is significantly higher at Rs. 4,472, suggesting that the stock is
trading at a premium of 2.55x. This discrepancy may be due to
market optimism, growth expectations, or other external factors
influencing investor sentiment.

Yash Anand

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