Fundamentals

AVENUE SUPERMARTS

Ticker: 540376
BUY: Rs 1496.45
Target: Rs 1675

Avenue Supermarts owns and operates supermarket D’Mart providing products like foods, non-foods, general merchandise and apparels through 160 stores across India. In Q2FY19, its revenue was up by 38.9 percent YoY at Rs 4873 crore. EBITDA grew by 22.6 percent YoY to Rs 389.6 crore, but EBITDA margin declined by 110 bps to 8 percent due to the high discount policy. PAT increased by 18.2 percent YoY to Rs 226 crore from Rs 191 crore. Going forward, the company plans to repay its debt, which will reduce interest costs and improve margins. In FY19, till September, the company added five stores and targets to take the total count to 25 by end of FY19. It also plans to expand its operations within the existing clusters. Considering its stellar financial performance so far, we recommend it as a BUY.



THERMAX LTD.

Ticker: 500411
BUY: Rs 1110.10
Target: Rs 1235

Thermax Limited is engaged in the business of manufacture and sale of boilers, heating and cooling equipment, industrial chemicals, and water and waste management equipment. In FY18, the company commissioned Phase I of its chemical factory at Dahej for ion exchange resins and specialty chemicals with capacity of 10,000 metric cubic p.a. Phase II of 12,000 metric cubic capacity addition is expected to be completed in FY20. Also, the trial production for manufacturing absorption chiller has started. Its international markets too are performing well. Its consolidated order book grew by 22 percent YoY and stands at Rs 6,411 crore. The oil & gas and consumption sectors would add to its order book in the near term. Considering its robust order book and extensive capacity expansion plans, we recommend it as a BUY.