INSTITUTIONAL EQUITY RESEARCH

Avenue Supermarts (DMART IN)

Pricing competitiveness remains high
19 June 2021
INDIA | RETAIL | Company Update
Our analysis of 15,000+ SKUs across online and offline grocery players suggests that DMart BUY
remains the most competitive retailer, offering the highest value to its customers. Here CMP RS 3317
are the parameters we analysed: SKUs and brands across 25 categories, discounting by the
TARGET RS 3640 (+10%)
top-4 players, pricing of 12 key loose staples by DMart and Reliance Smart vs. kirana
shops, pricing differential between DMart/Reliance’s physical stores and their online ones,
DMART DATA
pricing comparison for fresh fruits and vegetables across players, 38 private-label O/S SHARES (MN) : 648
categories and pricing comparison across popular brands, and lastly, eight months pricing MARKET CAP (RSBN) : 2069
trends across 42 SKUs for six online e-grocery players. Our channel checks suggest that MARKET CAP (USDBN) : 28.3
unit economics for DMart Ready stores are turning positive, and that the DMart is 52 - WK HI/LO (RS) : 3330 / 1954
LIQUIDITY 3M (USDMN) : 2.8
aggressively expanding its home-delivery offering in new cities such as Pune, Ahmedabad,
PAR VALUE (RS) : 10
Hyderabad, and Bengaluru.
SHARE HOLDING PATTERN, %
• DMart Ready is aggressively expanding home-delivery services in new cities: In cities
Mar 21 Dec 20 Sep 20
such as Ahmedabad/Pune, it offers home delivery in 40% / 38% pin codes, it is 22% / Promoters 75.0 75.0 75.0
18% Bengaluru/Hyderabad, and Mumbai/Thane it is 49%. It quickly opened 15/13 DII 6.7 6.7 6.1
DMart Ready stores in large cities Pune/Bengaluru, 5/3 in Hyderabad/ Ahmedabad. In FII 10.1 10.1 10.3
Mumbai, DMart has 195 stores, 84 in in adjourning Thane, Navi Mumbai, and Kalyan, Others 8.2 8.2 8.6
taking total DMart Ready stores to 315 across India. Our channel checks across 8 such
KEY FINANCIALS
stores suggest that average daily orders have increased from 18-20 per day pre-covid,
Rs mn FY21 FY22E FY23E
to 25 now. Our sensitivity analysis implies that these stores would breakeven at 18 Net Sales 2,37,872 3,02,299 4,33,922
orders/day with an average order value of Rs 1,500. EBIDTA 17,417 23,741 38,578
11,653 15,083 24,835
• DMart Ready offers high value across categories: Our comprehensive research across Net Profit
EPS, Rs 18.0 23.3 38.3
25 categories for DMart Ready/JioMart/Big Basket/Grofers reveals their SKUs at 1,697 /
PER, x 184.4 142.5 86.5
823 / 10,000+ / 1,850. On average, brands across each category were 16 / 8 / 57 /15. EV/EBIDTA, x 122.1 89.7 55.3
DMart Ready/Grofers/JioMart offered the highest discounting in 18 / 5 / 2 categories P/BV, x 17.5 15.6 13.2
across all SKUs (ex-private label); including private label (+27% SKU count), Grofers’ ROE, % 9.5 10.9 15.2
discounting increases significantly. Debt/Equity (%) 0.0 0.0 0.0

• Loose staples at a significant discount vs. kirana stores: We analysed 12 loose staple
items (dal, rice, wheat, sugar, etc.) from offline retailers and local kirana stores and PRICE VS. SENSEX
found that DMart offers 4% higher discount than Reliance Smart. Kirana stores’ pricing
280
is at 15% / 12% premium to DMart / Reliance Smart.
240
• DMart and Reliance’s online stores offer higher discounts: We looked at 53 SKUs
across DMart/Reliance Smart’s offline/online stores and found that the latter offered 200
1%/7% higher discounts while 19% / 37% SKUs had similar pricing. Also, DMart stores 160
offered 5% higher discounts than Reliance Smart stores.
120
• DMart Ready’s fresh products were expensive: Our analysis of fresh fruits a vegetables
80
suggests that Big Basket (291) has the highest number of SKUs followed by DMart (60)
and JioMart (48). Across 23 SKUs, DMart Ready’s pricing was at 19% / 11% premium to 40
JioMart/Big Basket. Big Basket was at an 8% premium to Jio Mart across all SKUs. Jan-18 Jan-19 Jan-20 Jan-21

• DMart’s private-label value-for-money highest: We analysed 38 private-label Avenue Super BSE Sensex

categories and found DMart Ready offered highest discount in 32, JioMart in 5 (vs. Source: Phillip Capital India Research
branded products). For 20 common SKUs, average discounts given by DMart Ready /
JioMart / Grofers / Big Basket / Amazon Pantry were 38% / 31% / 22% / 20% / 19%. Ankit Kedia, Research Analyst
(+ 9122 6246 4122) akedia@phillipcapital.in
Outlook and valuation: We maintain our BUY rating with a DCF-based target of Rs 3,640.
DMart has created a strong moat by offering ‘Every Day Low Prices’, driving high customer Rahul Jain, Research Associate
footfalls. Best-in-class store economics, aggressive store expansion, right product mix, and rjain@phillipcapital.in
low inventory days give it an edge over competitors. For our detailed IC report Click here.

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Please see penultimate page for additional important disclosures. PhillipCapital (India) Private Limited. (“PHILLIPCAP”) is a foreign broker-dealer unregistered in the USA. PHILLIPCAP research
is prepared by research analysts who are not registered in the USA. PHILLIPCAP research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by
Rosenblatt Securities Inc, an SEC registered and FINRA-member broker-dealer.
 AVENUE SUPERMARTS COMPANY UPDATE

DMart Ready home delivery growing faster than offline

store expansion for new cities
After the soft launch of DMart Ready (online) in cities such as Ahmedabad,
Hyderabad, and Bengaluru in Q3FY21, DMart has started opening stores across these
cities. Within a short span, it has opened 15/13 stores in bigger cities such as Pune
and Bengaluru respectively while in cities like Hyderabad and Ahmedabad it has 5
and 3 stores respectively. In Mumbai city, it has 195 stores while in adjourning area
of Thane, Navi Mumbai, and Kalyan, it has cumulatively 84 stores, taking the total
DMart Ready store count to 315 stores. We believe the online unit is expanding its
home delivery network aggressively, in places that it faces challenges in growing its
offline store count. In Mumbai and Thane regions, it offers home delivery service
across 49% of the city’s pin codes, in Ahmedabad/Pune this is 40%/38%,
Bengaluru/Hyderabad 22%/18%.

In Mumbai, DMart has expanded deeper in high-density regions, with 40% DMart
Ready stores across seven key areas in Mumbai. Borivali West has the highest
concentration of DMart Ready stores, followed by Andheri East, Kandivali West, and
Malad West. Since DMart already has existing stores in these areas, it understands
the micro-market’s needs and potential demand, which helps it to populate DMart
Ready stores to meet incremental demand and ease pressure from its existing loyal
brick-and-mortar store customers as they slowly migrate to the company’s online
stores. Further, 30% of DMart Ready stores are across six pin codes in Mumbai.

DMart Ready store count across cities 40% of DMart Ready across 7 key locations across Mumbai
18 17
250
16
195 14 13 13
200
12 11
150 10 9
8 8
8
100
6
50 31 26 27 4
15 13 5 3 2
0 0

30% of DMart Ready stores across 6 pin codes in Mumbai % pin codes serviced for home delivery by DMart Ready
14 13 60%
12 49%
12 50%
40%
10 9 38%
40%
8 8
8 7 30%
22%
6 18%
20%
4
10%
2
0%
0 Mumbai Ahmedabad Pune City Bengaluru Hyderabad
400067 400092 400104 400097 400064 400012 /Thane* City

Source: Company, PhillipCapital India Research; Note: * Ex-Vasai/Kalyan

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 AVENUE SUPERMARTS COMPANY UPDATE

Stores economics for DMart Ready

We spoke to 8 DMart Ready stores in Mumbai and Pune regions to understand the
current demand on the ground. Key takeaways are as follows:
• Average daily orders have increased from 18-20 per day in pre-covid times to 25
orders per day post covid. While the average basket size increased due to covid,
DMart has seen some decline in order value from Q4FY21, as it has started to
accept two top-up orders from Rs 500 within one month. However, this has also
increased the number of orders per day for the store.
• DMart Ready stores in residential areas get 15-20% orders from kirana stores,
while stores in commercial areas get significant orders daily from kirana stores, as
residential customer footfalls are low. Typically, the order value from kirana
stores is significantly higher than from retail customers.
• One shop we spoke to reported that the kirana shops’ share in the mix went from
two-thirds pre-covid to one-third post-covid, as more retail orders poured in.
• Regular DMart Ready stores only stock day-to-day items such as bread, idli batter,
paneer, milk, and other products for OTC sales. Marquee DMart Ready stores
(bigger than 700sq.ft. size) stock products such as stationery, household items,
and other accessories, in addition to items available in regular stores. These
stores have high area of 700+ sq. ft. compared to 500 sq. ft. for regular stores.
Typically, marquee stores sell OTC products worth Rs 2,000/day. Local vendors
provide milk and curd to the store daily, while other general OTC products are
serviced from DMart’s central warehouse every fortnight.
• DMart Ready stores are not involved in servicing home-delivery orders, as
warehouse directly fulfil these orders.
Our analysis of store-level economics for DMart Ready
• We believe that on an average, DMart Ready does 17 orders per day on a normal
day (excluding covid) while the average bill value is Rs 1,600.
• The store garners 3-4% of its revenues from OTC sales.
• Gross margins are 12% vs. 15% for the offline stores, as it would have lower
contribution from general merchandise.
• Typically, a store has 2-3 employees with store managers having a monthly salary
of Rs 15,000 while other staff has monthly salary of Rs 12,000.
• Given that some of these stores are in prime locations at the ground floor, we
have assumed a rent of Rs 100 per sq. ft. per month, with electricity at Rs 8,300
per month. These stores have a chiller for stocking dairy and other products
while they don’t have air conditioners.
• We have assumed other expenses at Rs 4,000 per month for communication,
marketing, and other expenses.
We believe these stores would be near breakeven currently, based on our
assumption.

Store economics for DMart Ready

Particulars Rs Comments
No of orders/day 17 Post covid these increased to 20-25 orders/store compared to 18-20 pre-covid
Avg. Bill Value (Rs) 1600 Reduced from Q4 due to allowing of Rs 500 top-up orders
Revenue 97,92,000
OTC sales 7,20,000 Average of Rs 2,000/day for dairy products, stationary, other products
Total Revenue 1,05,12,000
CoGS 92,50,560
Gross Profit 12,61,440
Gross Margin 12% Lower share of general merchandise
Employee Cost 5,04,000 2-3 employee/store, Rs 12-15,000 salary/month
Rent 6,00,000 Rs 100 per sq. ft. per month for 500 sq. ft. stores
Electricity 1,00,000 Rs 8,300 per month
Other cost 50,000 Telephone, marketing, and other expenses
Total Cost 1,05,04,560
EBIDTA 7440
Margin 0.1%
Source: PhillipCapital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Sensitivity of average basket value and order/day on EBIDTA margins

Rs/order Average Bill Value
Margins % Nos 1000 1200 1500 1800 2000 2200
12 -12.9 -9.2 -5.4 -2.8 -1.4 -0.3
15 -8.5 -5.4 -2.2 0 1.1 2
Order/day

18 -5.4 -2.8 0 1.9 2.8 3.6

21 -3.1 -0.8 1.6 3.2 4.1 4.8
25 -0.9 1.1 3.2 4.6 5.3 5.9
30 1.1 2.8 4.6 5.8 6.4 6.9
Source: PhillipCapital India Research

Benchmarking of brands/platform in terms of speed of delivery and overall delivery experience

Source: Delivery Delight Index March’21 – Redseer & Shadowfax

Online e-grocery: US$ 24bn opportunity by 2025

As per Redseer (business management consultancy), e-grocery households can be
categorized as into ‘value first’ and ‘convenience first’ customers.

Value-first vs. convenience-first

• Value first customers have concerns about high pricing, limited discounts, and
return/exchange policies
• Convenience first customers are more concerned about availability of wider
product basket in one place, crowds/waiting time, and product
quality/assortment.
• Value-first customers will lead 55% of the e-grocery market in 2025.
• In India, at present, 65% of the e-grocery addressable households (130mn
households) are value-first, while the rest are convenience-first customers.
• Value-first households have lower income compared to convenience-first
household and therefore cannot prioritize wider variety, exotic assortment, and
faster access. Hence, they prioritize best-priced products under discount, cash-
back offers, and sales, even if there is limited variety, longer waiting times, or
inconvenient experiences.

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 AVENUE SUPERMARTS COMPANY UPDATE

• 65% of the value-first customers prefer online groceries to be delivered in 6

hours to 2 days.
• Unit economics for servicing a value first household is highly promising. Most of
the determinants of profitability – i.e., bulk purchase, assortment, private label
mix, delivery cost and stickiness – are in favour of value-first households
compared to convenience first household. Hence the contribution margins for
serving a value-first household are 3% higher than a convenience-first
household.

e-grocery households attribute comparison

Value First Convenience first
Particulars Household Household Comments
Demand for lower price/high discount High Moderate Discount provided reduced net income
Buk purchase behaviour High Moderate Bulk purchase leads to high AOV, reduced fulfilment cost per order
Assortment need Limited Very wide Low assortment gives better ability to negotiate margins with brands
Private-label openness High Moderate High gross margins led by own manufacturing
Fast-delivery demand Low High Low cost of fulfilment for scheduled delivery, as order can be batched vs. on-demand
Stickiness to platform Moderate-High Moderate-High High stickiness reduced marketing spend
Source: Redseer Jan 2021

Favourable unit economics for value first customer

Value First Convenience first
Particulars Household Household Comments
Commission/margins (incl. add income) 15.0% 22.0% High margins from private label, brand tie-ups are passed on to value customers
Cashback -2.0% -2.0% Both are interested in better priced products against cashback for future use
Supply chain cost -10.0% -20.0% High cost to service convenient first customers for on-demand delivery and low AOV
Payment gateway cost -1.5% -1.5% No difference, could vary across platforms
Marketing expenses -4.0% -4.0% No difference, could vary across platforms
Contribution margins -2.5% -5.5%
Source: Redseer Jan 2021

Grofers: Unit economics

Pre-covid Covid Period
Particulars (Dec'19) (Jun'20) Comments
Commission/margins 12.0% 15.0% High sale of private label and brand tie-up led to higher margins
Cashback -6.0% -1.0% Drop in cashback as online grocery gained traction during covid
Supply chain cost -9.0% -8.0% Increased category penetration, high AOV resulted in lower cost as % of order
Payment gateway cost -1.0% -1.0% No change
Marketing expenses -8.0% -1.0% Organic customer acquisition led to lower marketing spends
Contribution margins -12.0% 4.0%
Source: Redseer Jan 2021

Monthly visits (millions) from desktop and mobiles for online grocery delivery
players
14 JioMart Big Basket Grofers

12

10

0
July'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21 May'21
Source: Similarweb

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 AVENUE SUPERMARTS COMPANY UPDATE

Financials analysis of online grocery players

Financial analysis across online players suggests that all companies are making
significant losses, with online gross margins being significantly lower than offline
ones, because the former’s revenue mix is skewed towards lower-margin food
products with minimal share from general merchandise. However, our channel
checks with the industry suggests that in FY21, due to covid and strong demand, unit
economics across players have turned positive – with reducing losses, as the
customers’ acquisition costs and discounting have reduced substantially.

Financials for online e-grocery players

Rs mn DMart Ready Big Basket - B2B Big Basket - B2C Grofers
FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20
Revenue 441 1436 3540 15832 27546 37900 14096 23810 34176 5328 12823 22892
% growth 225 147 74 38 69 44 141 79
COGS 409 1278 3177 14,285 25,449 34,881 12,611 21,373 30,267 4,934 11,996 21,082
Gross Profit 33 158 363 1547 2097 3019 1485 2437 3909 393 827 1810
Gross Margin % 7% 11% 10% 10% 8% 8% 11% 10% 11% 7% 6% 8%
Employee Expenses 128 161 266 1540 2732 3435 1175 2168 2912 1560 2490 3764
% of sales 29% 11% 7% 10% 10% 9% 8% 9% 9% 29% 19% 16%
A&P / Discounts 25 15 10 944 1889 1481 58 138 242 742 2104 3390
% of sales 6% 1% 0% 6% 7% 4% 0% 1% 1% 14% 16% 15%
Freight/Distribution Cost 17 40 74 265 598 818 759 1430 2122 755 990 1861
% of sales 4% 3% 2% 2% 2% 2% 5% 6% 6% 14% 8% 8%
Other Expenses 258 386 498 1866 2437 2371 1124 1941 2610 695 1926 4648
% of sales 59% 27% 14% 12% 9% 6% 8% 8% 8% 13% 15% 20%
Total Expenses 837 1,880 4,025 18,899 33,105 42,986 15,727 27,049 38,153 8,687 19,506 34,745
EBIDTA -396 -444 -484 -3068 -5560 -5086 -1631 -3240 -3977 -3359 -6683 -11853
EBIDTA Margin% -89.7% -30.9% -13.7% -19.4% -20.2% -13.4% -11.6% -13.6% -11.6% -63.0% -52.1% -51.8%
Depreciation 106 111 327 238 547 841 92 171 238 243 440 780
EBIT -485 -514 -738 -3306 -6106 -5926 -1723 -3411 -4215 -3602 -7122 -12633
Source: MCA, Company, PhillipCapital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Category comparison across online players

We conducted comprehensive research across 25 categories for DMart Ready,
JioMart, Big Basket, and Grofers. The data gathered was across websites on the same
day to access the pricing strategy through discounts across all SKUs in the category
coupled with analysing the number of brands and SKUs across categories. We
excluded private label brands/products to avoid any skewing in discounting.

Key observations
• SKUs
o Big Basket’s SKU count was the highest across 25 product categories while
JioMart had the lowest count across most of categories.
o JioMart SKU count was half of Grofers and DMart Ready’s, and didn’t offer
any significant choice to customers.
o Across 25 categories, Big Basket has 10,000+ SKUs, JioMart had mere 823,
while DMart Ready had 1,697 and Grofers 1,850. We believe keeping
limited number of SKU of well-known brands improves customer experience
and decision making.
o We believe DMart Ready is focused on keeping SKUs that cater to more
than 90% of its customer needs, unlike other retailers who focus on keeping
high gross-margin SKUs.
• Brands
o Big Basket had the highest brand count in all 25 categories while JioMart
offered lowest number of brands in 24 categories.
o On average, DMart had 16 brands across each category compared to mere
7.6 brands per category for Jio Mart, 57 for Big Basket and 15 for Grofers.
• Discounting over MRP
o DMart Ready, Grofers, and JioMart offered the highest discounting in 18, 5,
and 2 categories respectively.
o Clearly, DMart is price competitive, even in categories where it does not
offer highest discount.
o Only in cooking oil, DMart Ready had the lowest discounts due to the lowest
number of SKUs for olive oil, where discounting was very high.
• Inclusion of private labels across all categories
o Total SKUs for Grofers, Big Basket, DMart Ready and JioMart jumped by
27%, 11%, 19% and 16%.
o In terms of discounting, Grofers, Big Basket, DMart Ready, and JioMart
offered highest discount in 10, 1, 12, and 2 categories respectively.
o Grofers benefited the most due to deep discounting for its private label
collection.

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 AVENUE SUPERMARTS COMPANY UPDATE

Number of brands and SKUs across online retailers (ex-private label)

Grofers Big Basket DMart Ready Jio Mart
Category Brands SKUs Brands SKUs Brands SKUs Brands SKUs
Flours & Grains 15 50 46 181 13 41 5 19
Cooking Oil 24 91 88 392 28 82 20 48
Ghee & Vanaspati 14 23 22 94 16 40 4 7
Dals & Pulses 12 81 35 163 5 57 3 39
Rice & Rice Products 15 80 23 146 12 48 8 31
Salt Sugar Jaggery 16 27 54 153 13 23 9 13
Masala & Spices 18 115 100 1003 28 170 14 86
Dry Fruits 10 18 58 415 18 57 6 136
Biscuits & Cookies 17 142 47 614 18 123 9 63
Chocolates 16 74 85 475 29 94 12 38
Sweets 11 37 12 48 11 23 1 3
Snacks & Farsans 20 127 110 895 43 217 13 49
Pasta & Noodles 20 89 52 334 13 43 9 29
Deos & Perfumes 9 47 100 1082 12 38 10 25
Oral Care 12 93 27 333 9 57 9 42
Hair Care 35 165 186 1201 26 142 15 43
Diapers & Wipes 10 81 25 277 6 46 4 10
Detergent & Fabric Care 22 99 40 239 16 74 11 48
Freshner & Repellents 16 72 45 262 14 58 3 7
Cleaners 13 81 113 570 13 47 5 17
Pooja Needs 4 20 41 253 17 48 1 1
Dishwash 8 29 19 92 9 32 5 14
Tea 13 73 50 456 14 73 9 30
Coffee 4 17 36 150 7 35 2 9
Fruit Juices 12 118 14 270 10 29 4 15
Source: Various websites, PhillipCapital India Research

% discounts on MRPs across online retailers

Category Grofers Big Basket DMart Ready JioMart
Flours & Grains 20% 7% 19% 16%
Cooking Oil 26% 26% 25% 32%
Ghee & Vanaspati 7% 5% 11% 10%
Dals & Pulses 18% 12% 15% 10%
Rice & Rice Products 30% 16% 25% 28%
Salt Sugar Jaggery 13% 6% 19% 16%
Masala & Spices 13% 8% 25% 11%
Dry Fruits 36% 11% 34% 7%
Biscuits & Cookies 26% 7% 27% 27%
Chocolates 9% 5% 29% 16%
Sweets 22% 1% 32% 12%
Snacks & Farsans 16% 6% 28% 21%
Pasta & Noodles 33% 13% 33% 15%
Deos & Perfumes 29% 21% 39% 20%
Oral Care 17% 9% 21% 17%
Hair Care 19% 10% 23% 18%
Diapers & Wipes 27% 13% 28% 24%
Detergent & Fabric Care 17% 12% 16% 16%
Freshener & Repellents 14% 5% 23% 11%
Cleaners 7% 8% 16% 13%
Pooja Needs 2% 23% 27% 10%
Dishwash 10% 9% 19% 17%
Tea 13% 8% 20% 15%
Coffee 13% 6% 21% 12%
Fruit Juices 18% 11% 28% 28%
Source: Various websites, PhillipCapital India Research
Note: The colour-coding depicts the highest discounting (green colour) to lowest value (red colour)

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 AVENUE SUPERMARTS COMPANY UPDATE

Comparison of offline loose staples

We believe staples form a high proportion of customers’ monthly baskets, so pricing
across this category is critical for the success of any retailer to cajole repeat customer
footfalls. Hence, we analysed prices of 12 loose staple items (such as dal, rice, wheat,
sugar, etc.) from offline retailers such as DMart, Reliance Smart, and local kirana
stores to gauge the price competitiveness. All stores are in the same vicinity of
Mumbai for a like-to-like comparison.

Key observations
• DMart vs. Reliance Smart: Half of the products were within a 5% deviation of
each other. Overall DMart offered 4% higher discount across all products
compared to Reliance Smart. Reliance Smart was cheaper in only 4 out of 12
products.
• Kirana comparison: Kirana stores’ prices were at a 15% premium over DMart’s
and 12% over Reliance Smart’s across the 12 loose staple products. Kirana stores’
products were priced at a premium to DMart stores across all 12 products, at a
discount in two products compared to Reliance Smart.

Loose staple Rs per kg

DMart Premium Premium
DMart Reliance Premium V/s Local over over
Product Store Smart store Rel Smart kirana DMart Reliance
Masoor Dal 80.0 77.0 3.9% 96 17% 20%
Chana Dal 67.5 72.0 -6.3% 80 16% 10%
Sugar 36.0 37.5 -4.0% 40 10% 6%
Basmati Mogra 38.5 38.0 1.3% 42 8% 10%
Sabudana 52.0 68.5 -24.1% 68 24% -1%
Lokwan Wheat 29.5 28.0 5.4% 30 2% 7%
Groundnuts 124.0 126.0 -1.6% 132 6% 5%
Basmati Rice 71.5 79.0 -9.5% 120 40% 34%
Tur Dal 102.0 107.0 -4.7% 104 2% -3%
Pulav Rice 53.5 49.0 9.2% 64 16% 23%
Moong Dal 98.5 99.0 -0.5% 112 12% 12%
Jada Poha 38.0 42.0 -9.5% 48 21% 13%
Total 791 823 -4% 936 15% 12%
Source: PhillipCapital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Offline vs. online price comparison

To get an understanding of pricing variations between online and offline for the same
retailer, we looked at the prices of 53 SKUs across categories for DMart vs. DMart
Ready and Reliance Smart store vs. JioMart. Stores were located within 15 minutes of
the pin code chosen for online prices. Competitive online and offline prices help
DMart to seamlessly offer omnichannel services to customers and remain
competitive even if its customers switch channels within its brand.

Key observations
• DMart vs. DMart Ready
o 57% products were within a 5% price deviation
o 26% / 17% of products had a deviation 5-10% / >10%.
o Overall DMart Ready offered 1% higher discount across all SKUs.
o In 50% of the products, DMart Stores offer higher discounts than DMart
Ready; pricing was similar across both channels in 19%.
o In dairy and packed food, DMart stores offer higher discounts; in other
categories DMart Ready was more competitive.

• Reliance Smart vs. JioMart

o Price variation was relatively stable with 62% / 19% / 19% products seeing a
deviation of 5% / 5-10% / >10%.
o Reliance Smart offered higher discounts in only 7% SKUs
o In 37% SKUs, pricing was similar.
o Overall JioMart offered 4% higher discounts.

• DMart vs. Reliance Smart - Offline comparison

o Price variation across 34% / 32% / 34% of the 53 SKUs was 5% / 5-10% /
>10%.
o DMart offered 5% higher discounts.
o In 20% of SKUs, both retailers had similar pricing
o Only in 13% SKUs Reliance Smart offered higher discounts, clearly showing
that DMart is more competitive.

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Online vs. offline price comparison across DMart and Reliance

DMart store Rel Store DMart
DMart DMart Prem/Discount Jio Reliance Prem/Discount Prem/Disc vs.
Product MRP Ready Store vs. Ready Mart Smart vs. Jio Rel Smart
Dairy
Amul Pure Ghee Pouch 1L 485 450 445 -1% 444 444 0% 0%
Britania Cheese Slices 200g 155 125 140 11% 130 130 0% 8%
Amul Butter 500g 235 225 225 0% 225 228 1% -1%
Nestle Milkmaid 400g 125 118 110 -7% 114 116 2% -5%
Amul Masti Dahi 40 38 35 -9% 38 37 -2% -6%
Amul Cheese Block 200g 106 98 96 -2% 99 99 0% -3%
Amul Taza 1L 64 61 59 -3% 61 64 5% -8%
Staple
Tata Salt Iodized 1kg 21 18 18 0% 18 18 0% 0%
Fortune Ricebran Oil 5L 1100 899 899 0% 899 899 0% 0%
Fortune Sunlite Sunflower Refined Oil 1L 245 179 177 -1% 179 245 27% -28%
Figaro Olive Oil 200ml 299 244 249 2% 249 249 0% 0%
Madhur Pure Sugar 1kg 60 47 47 0% 47 47 0% 0%
Tata Sampann Moong Dal 500g 93 83 91 9% 85 85 0% 7%
Everest Coriander Powder 200g 62 50 56 11% 50 56 10% 0%
Kohinoor Charminar Basmati Rice 5kg 515 349 335 -4% 339 339 0% -1%
Packaged Food
Parle Real Elaichi Rusk 400g 60 52 45 -16% 40 40 0% 13%
Krack Jack Biscuits 800g 120 85 85 0% 80 80 0% 6%
Kelloggs Chocos 1.2kg 470 385 375 -3% 375 395 5% -5%
Quaker Oats 1.5kg 260 200 199 -1% 200 230 13% -13%
Kissan Fresh Tomato Ketchup 950ml 120 86 87 1% 87 89 2% -2%
Maggi Rich Tomato Ketchup 1kg 150 120 140 14% 129 140 8% 0%
Ching's Green Chilli Sauce 190g 150 120 140 14% 129 140 8% 0%
Mother's Recipe Mixed Pickle 1kg 55 43 40 -8% 49 51 4% -22%
Maggi Masala Noodles 560g 91 75 73 -3% 75 78 4% -6%
Cadbury Oreo Biscuits 300g 80 55 55 0% 60 60 0% -8%
Kit Kat Pack 126g 100 92 85 -8% 80 93 14% -9%
Cadbury Gold Choclairs 605g 200 139 129 -8% 180 180 0% -28%
Haldiram Aloo Bhujia 1kg 190 152 143 -6% 152 170 11% -16%
Pringles Original 107g 99 79 75 -5% 79 79 0% -5%
Drinks & Beverages
Tropicana Mixed Fruit 1L 110 75 67 -12% 73 110 33% -39%
Cadbury Bourn Vita Jar 1kg 410 360 360 0% 360 369 2% -2%
Tata Tea Gold 250g 145 130 131 1% 135 93 -45% 41%
Tang Orange 500g 135 119 110 -8% 116 115 -1% -4%
Personal care
Dove Daily Shine Shampoo 650ml 590 390 539 28% 390 490 20% 10%
Head & Shoulders Smooth & Silky 340ml 285 265 265 0% 265 266 0% 0%
Stayfree Dry-Max Sanitary Pad 42pcs 450 319 298 -7% 300 300 0% -1%
Cinthol Cool Soap 125gx3 120 106 104 -2% 106 112 5% -7%
Gillette Guard Razor + 6 cartridges 70 60 59 -2% 64 69 7% -14%
Durex Condoms, Extra Ribbed 10pcs 217 190 197 4% 177 177 0% 11%
Nivea Water Lily Shower Gel 250ml 199 159 159 0% 169 169 0% -6%
Colgate Maxfresh 150gx2 170 109 108 -1% 109 135 19% -20%
Engage Urge Men Deodorant 190 135 165 18% 179 189 5% -13%
Lotus Herbal SPF 40 Cream 100g 425 248 255 3% 341 297 -15% -14%
Garnier Men Power White Facewash 100g 190 155 139 -12% 142 149 5% -7%
Household care
Lizol Disinfectant Cleaner Citrus 975ml 179 147 151 3% 160 174 8% -13%
Surf Excel Easy Wash 1.5kg 180 130 137 5% 130 165 21% -17%
Harpic Bathroom Cleaner Lemon 500ml 95 85 88 3% 88 88 0% 0%
Odonil Jamine Mist Block 75g 70 65 60 -8% 64 65 2% -8%
Vim Dishwash Gel - Lemon 750ml 155 130 120 -8% 109 120 9% 0%
Harpic Toilet Cleaner 1Lx2 356 269 259 -4% 295 316 7% -18%
Rin Detergent Bar 250gx4 60 54 57 5% 58 59 2% -3%
Comfort Lily Fabric Conditioner 860ml 225 185 185 0% 194 203 5% -9%
Exo Dishwash Bar 700g 67 56 55 -2% 57 57 0% -4%
Source: PhillipCapital India Research

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Online fresh produce comparison

We compared a basket of 23 fresh fruits and vegetables across DMart Ready, JioMart,
Big Basket, and Grofers for a particular pin code in Mumbai. We have made some
price adjustments due to the difference in grammage between players, and assumed
all products are of similar quality. DMart Ready has recently started offering home
delivery of fresh produce. We believe that urban upper middle-class customers prefer
to buy all household needs from one portal, and hence offering fresh fruits and
vegetables is critical.

Key observations
• Total SKUs
o DMart Ready / JioMart / Big Basket / Grofers had total SKUs of 60 / 48 / 291
/ 17.
o Grofers had very limited SKUs and basic products.
o DMart Ready and JioMart covered essential fruits and vegetables, but Big
Basket has gone a couple of steps further with the addition of exotic,
organic, and pre-chopped produce.
• Price comparison
o All other players were more price competitive than DMart Ready.
o Across 23 SKUs, DMart Ready’s pricing was at 19%/11% premium to
JioMart/Big Basket.
o Only in 1 out of 5 SKUs was DMart Ready’s pricing at a discount to
JioMart/Big Basket.
o For the limited number of SKUs offered by Grofers, DMart Ready’s products
were at a 26% premium.
o Big Basket was at an 8% premium compared with Jio Mart across all the
SKUs.

Fresh fruits and vegetables offering across online players

DMart Ready premium/discount vs.
Product (Rs) Qty DMart Ready JioMart Big Basket Grofers JioMart Big Basket Grofers
Potato 1 kg 28 22 22 25 27% 27% 12%
Tomato 1 kg 40 25 25 21 60% 60% 90%
Onion 1 kg 28 28 28 30 0% 0% -7%
Bhendi (Okra) 500 g 39 29 27 27 34% 44% 44%
Beetroot 500 g 32 22 22 22 45% 45% 45%
Garlic 200 g 42 34 51 37 24% -18% 14%
Ginger 200 g 21 14 15 14 52% 38% 50%
Cucumber 500 g 32 27 32 29 19% 0% 10%
Arbi (Colocasia) 500 g 40 34 38 40 18% 5% 0%
Karela (Bitter Gourd) 500 g 40 32 32 NA 25% 25% NA
Brinjal 500 g 30 25 52 NA 20% -42% NA
Sweet Potato 500 g 49 40 39 NA 23% 26% NA
Capsicum 500 g 32 21 19 NA 52% 68% NA
Pear 4 pcs 145 105 110 NA 38% 32% NA
Kiwi 3 pcs 187 150 120 NA 25% 56% NA
Raw Mango 1 kg 80 79 80 NA 1% 0% NA
Musk Melon 1 kg 41 29 48 NA 42% -15% NA
Mosambi 1 kg 113 139 154 NA -19% -27% NA
Papaya 1 kg 66 53 51 52 23% 28% 26%
Pomegranate 1 kg 239 188 196 NA 27% 22% NA
Apple - Royal Gala 1 kg 318 298 320 NA 7% 0% NA
Watermelon 1 kg 20 12 21 NA 69% -5% NA
Cabbage 500 g 29 13 16 18 121% 79% 61%
Source: Various websites, PhillipCapital India Research

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Private label comparison

We analysed private label pricing data for 38 product categories from staples, F&B,
personal care, and household items across DMart Ready, JioMart, Grofers, Big Basket
and Amazon Pantry. We also compared these products to a branded product to get a
pricing comparison.

Key observations
• Common products: Among 20 common SKUs across all platforms, DMart Ready,
JioMart, Grofers, Big Basket and Amazon Pantry offered an average discount of
38%, 31%, 22%, 20% and 19% respectively, compared to branded products.
• Discounting: Among 38 private-label products, DMart Ready offered the highest
discount in 32 products, followed by JioMart in 5 products. Grofers, Big Basket,
and Amazon Pantry offered the lowest discounting in 14, 9, and 11 products.
• Private label portfolio: Staples (dals, pulses, spices, flour, etc.) and household
(cleaning supplies, washing supplies, freshener, etc.) categories remain a key
focus within the private label portfolio across all platforms.

Private label comparison

Product Quantity Brand Brand Price DMart JioMart Grofers BigBasket Amazon
Red Chilli Powder 500g Everest 198 74 143 155 85 146
Hing Powder 50g MTR 65 45 50 66 54 55
Jeera Seeds 200g Satyam 82 46 47 75 48 64
Sugar 5kg Madhur 213 200 203 200 205 236
Cooking Oil – Soyabean 1L Gemini 159 155 NA 156 NA NA
Unpolished Toor Dal 1kg Tata Sampann 159 148 125 147 125 127
Groundnut 500g Satyam 106 89 76 100 76 80
Idli Rava 1kg Satyam 56 33 40 34 50 37
Besan 500g Satyam 62 42 37 55 43 55
Maida 1kg Satyam 56 35 35 48 36 50
Kolam Raw Rice 5kg Omsom 618 325 312 316 380 389
Tomato Ketchup 1kg Kissan 95 60 75 74 79 85
Breakfast Cereal 1.2kg Kellogg’s Chocos 375 209 263 299 255 275
Oats 1kg Quaker 171 95 130 112 108 NA
Toast 400g Britannia 46 36 38 47 NA NA
Pasta Macaroni 400g Weikfield 44 22 33 44 76 60
Almonds 500g Happilo 688 330 305 299 399 385
Cashews 500g Happilo 788 499 415 404 415 560
Green Tea 25pcs Lipton 135 69 80 89 NA 99
Instant Coffee 50g Nescafe 130 54 95 67 NA NA
Soap 125gx3 Pears 123 90 93 100 NA 112
Handwash 750ml Dettol 99 60 88 79 NA 77
Face Wash 150ml Himalaya 124 50 78 75 NA 140
Almond Hair Oil 200ml Bajaj 130 60 NA 74 NA NA
Dishwash bar 200gx3 Vim 41 29 36 32 38 NA
Dishwash gel 750ml Pril 124 70 94 95 132 89
Fabric Conditioner 800ml Comfort 178 110 NA 130 NA 143
Face Tissue 200pcs Origami 78 55 NA 98 119 100
Stainless Steel Scrub 1pc Scotch Brite 33 10 15 23 NA NA
Scrub Pads 5pcs Scotch Brite 65 29 33 45 NA NA
Disinfectant Cleaner 1L Domex 165 94 99 122 98 139
Detergent Bar 250gx4 Rin 57 40 71 49 NA NA
Floor Cleaner 2L Lizol 349 159 189 244 179 193
Glass Cleaner 1L Colin 149 55 NA 82 154 131
Air Freshner Pouch 10g Odonil 40 29 35 39 NA 35
Sanitizer 50ml Lifebuoy 22 19 23 20 25 20
Bathroom Cleaner 500ml Harpic 88 49 NA 75 50 60
Toilet Cleaner 1L Harpic 147 66 99 100 168 109
Source: Various websites, PhillipCapital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Online price comparison trend

Over the last eight months, we have tracked a basket of 42-50 products across six
major categories (dairy, staples, packaged food, beverages, personal care, and
household items) from six online grocery platforms (Amazon Pantry, Grofers, Big
Basket, DMart Ready, JioMart, and Flipkart Supermart). The composition of the
basket on average has been around 45% stables, (including packaged food and dairy),
10% beverages, and 45% FMCG. Products were selected to achieve as much common
ground as possible across platforms. The delivery was set to a fixed single pin code in
Mumbai for all platforms.

Key observations
• Total discount: DMart Ready has consistently offered 20%+ discount across last 8
months followed by JioMart offering 19% discount. Overall discounting has
increased for Amazon Pantry in last 2 months at 20% compared to 15% discount
in the past months. Discount at Flipkart has increased from 7% to 13% on last 2
months while Big Basket and Grofers discounting has remained steady at c.14%
each.
• Fulfilment rate: DMart has been able to maintain its high discounting at a
fulfilment rate of 95%+ whereas Amazon Pantry and JioMart stood far behind at
75% and 66% respectively in last 2 months. Amazon Pantry and JioMart faced
fulfilment issues in dairy and personal care respectively. Big Basket and Grofers
continue to perform at 90% levels while Flipkart was at 75%.
• Pricing range: DMart Ready and JioMart offered the highest discounting in about
half the SKUs measured. On the other hand, Big Basket and Flipkart provided the
least amount of discounting in 20% and 10% of SKUs respectively.
• Overall category discounting: Staple and personal care are the key categories
driving traffic to the platforms, with total discounting of 21% and 20%
respectively. Over the last two months, we have seen higher discounting in dairy
products, while it has declined for drinks and beverages.
• Top-3 discounters per category (highest to lowest)
o Dairy: Amazon Pantry (low fulfilment), Grofers, DMart Ready
o Staples: DMart Ready, JioMart, Grofers
o Packaged food: DMart Ready, JioMart, Amazon Pantry (low fulfilment)
o Beverages: DMart Ready, JioMart, Amazon Pantry
o Personal care: DMart Ready, JioMart (low fulfilment), Amazon Pantry
o Household: DMart Ready, JioMart, Big Basket

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 AVENUE SUPERMARTS COMPANY UPDATE

Fulfilment rate is the highest for DMart while JioMart and Overall DMart, JioMart offer lowest price for 50% of
Amazon Pantry have issues inventory
Amazon Pantry Grofers Amazon Pantry Grofers
Big Basket D-Mart Big Basket D-Mart
JioMart Flipkart Supermart JioMart Flipkart Supermart
110% 80%
100% 70%
90% 60%
50%
80%
40%
70%
30%
60%
20%
50% 10%
40% 0%
-10%

Source: Various Websites, Phillip Capital India Research

Discounting is highest for personal care and staples DMart / JioMart offers highest discounts across categories
Dairy Staples Amazon Pantry Grofers
Packaged Food Drinks & Beverages Big Basket D-Mart
Personal Care Household JioMart Flipkart Supermart
30% 25%

25% 20%

20% 15%

15% 10%
10%
5%
5%
0%
0%
15-Oct 15-Nov 15-Dec 15-Jan 15-Feb 15-Mar 15-Apr 15-May 15-Jun

Source: DMart, Phillip Capital India Research

Dairy: Amazon, Grofers, DMart offer highest discounts Staples: Highly competitive category with 20%+ discount
Amazon Pantry Grofers Amazon Pantry Grofers
Big Basket D-Mart Big Basket D-Mart
JioMart Flipkart Supermart JioMart Flipkart Supermart
14% 40%
12% 35%
10% 30%
8% 25%
6% 20%
4% 15%
2% 10%
0% 5%
-2%

Source: Various Websites, Phillip Capital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Packed Food: DMart/ JioMart lead discounting Beverages: Overall discounting has reduced in last 2 months
Amazon Pantry Grofers Amazon Pantry Grofers
Big Basket D-Mart Big Basket D-Mart
JioMart Flipkart Supermart JioMart Flipkart Supermart
30% 25%

25% 20%
20%
15%
15%
10%
10%
5% 5%
0%
0%
-5%

Source: Various Websites, Phillip Capital India Research

Personal Care: DMart, JioMart discount offered is 26%+ Household products: DMart, JioMart offer high discounts
Amazon Pantry Grofers Amazon Pantry Grofers
Big Basket D-Mart Big Basket D-Mart
JioMart Flipkart Supermart JioMart Flipkart Supermart
35% 30%
30% 25%
25%
20%
20%
15%
15%
10%
10%
5% 5%

0% 0%

Source: Various Websites, Phillip Capital India Research

Valuation
DMart: DCF valuation assumptions (Rs mn)
WACC 10.4%
PV of FCF 588859
Terminal Growth rate % 6.5%
Terminal value 98,30,045
PV of Terminal Value 1744540
Total value of firm 2333400
add: investments/associates 4023
less net debt (cash) -20240
Total Equity Value 23,57,663
Number of shares outstanding (m) 648
Value per share (Rs) 3,640
Source: Phillip Capital India Research

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 AVENUE SUPERMARTS COMPANY UPDATE

Financials (Standalone)
Income Statement Cash Flow
Y/E Mar, Rs mn FY21 FY22E FY23E FY24E Y/E Mar, Rs mn FY21 FY22E FY23E FY24E
Net sales 2,37,872 3,01,926 4,33,474 5,47,857 Pre-tax profit 15,448 20,383 33,560 43,240
Growth, % -3.5 26.9 43.6 26.4 Depreciation 3,714 4,775 5,999 7,431
Other income 0 373 447 537 Chg in working capital -1,203 -809 -8,247 -7,466
Total income 2,37,872 3,02,299 4,33,922 5,48,394 Total tax paid -2,561 -5,300 -8,726 -11,242
Raw material expenses -2,03,563 -2,56,637 -3,67,586 -4,64,035 Other operating activities -1,543 -1,417 -981 -929
Employee expenses -4,951 -5,991 -7,309 -8,917 Cash flow from operating activities 13,855 17,632 21,606 31,034
Other Operating expenses -11,940 -15,930 -20,448 -25,700 Capital expenditure -19,677 -21,259 -26,253 -29,688
EBITDA 17,417 23,741 38,578 49,742 Chg in investments 21 7,000 1,000 0
Growth, % -17.9 36.3 62.5 28.9 Other investing activities 9,251 1,831 1,415 1,385
Margin, % 7.3 7.9 8.9 9.1 Cash flow from investing activities -10,405 -12,428 -23,838 -28,303
Depreciation -3,714 -4,775 -5,999 -7,431 Free cash flow (ex-Lease Liability)
EBIT 13,704 18,966 32,580 42,311 Equity raised/(repaid) 0 0 0 0
Growth, % -23.1 38.4 71.8 29.9 Debt raised/(repaid) -1,342 0 0 0
Margin, % 5.8 6.3 7.5 7.7 Dividend (incl. tax)
Interest paid -345 -414 -434 -456 Other financing activities -61 -414 -434 -456
Other Non-Operating Income 2,089 1,831 1,415 1,385 Cash flow from financing activities -1,403 -414 -434 -456
Non-recurring Items 0 0 0 0 Net chg in cash 2,047 4,790 -2,667 2,275
Pre-tax profit 15,448 20,383 33,560 43,240
Tax provided -3,795 -5,300 -8,726 -11,242 Valuation Ratios
Profit after tax 11,653 15,083 24,835 31,998 FY21 FY22E FY23E FY24E
Others (Minorities, Associates) Per Share data
Net Profit 11,653 15,083 24,835 31,998 EPS (INR) 18.0 23.3 38.3 49.4
Growth, % -13.7 29.4 64.6 28.8 Growth, % (13.7) 29.4 64.6 28.8
Net Profit (adjusted) 11,653 15,083 24,835 31,998 Book NAV/share (INR) 190.0 213.2 251.6 301.0
Unadj. shares (m) 647.8 647.8 647.8 647.8 FDEPS (INR) 18.0 23.3 38.3 49.4
CEPS (INR) 23.7 30.7 47.6 60.9
Balance Sheet CFPS (INR) 21.4 27.2 33.4 47.9
Y/E Mar, Rs mn FY21 FY22E FY23E FY24E DPS (INR) - - - -
Cash & bank 14,320 19,110 16,444 18,719 Return ratios
Debtors 721 828 1,189 1,502 Return on assets (%) 8.7 10.1 13.9 15.0
Inventory 21,673 22,362 32,098 40,566 Return on equity (%) 9.5 10.9 15.2 16.4
Loans & advances 7,100 8,165 9,390 10,799 Return on capital employed (%) 9.4 10.9 15.1 16.3
Other current assets 258 284 312 343 Turnover ratios
Total current assets 44,072 50,749 59,433 71,929 Asset turnover (x) 2.8 3.0 3.5 3.6
Investments 15,108 8,108 7,108 7,108 Sales/Total assets (x) 2.0 2.3 2.7 2.9
Gross fixed assets 78,953 99,512 1,24,765 1,53,252 Sales/Net FA (x) 3.5 3.5 4.1 4.3
Less: Depreciation -11,744 -16,519 -22,518 -29,949 Working capital/Sales (x) 0.2 0.2 0.1 0.1
Add: Capital WIP 10,062 10,762 11,762 12,962 Receivable days 0.9 0.9 0.8 0.9
Net fixed assets 77,271 93,754 1,14,009 1,36,266 Inventory days 31.3 26.6 22.9 24.2
Non-current assets 13 13 13 13 Payable days 7.8 7.3 6.6 7.0
Total assets 1,36,464 1,52,625 1,80,563 2,15,316 Working capital days 24.4 20.2 17.1 18.1
Liquidity ratios
Current liabilities 8,588 9,598 12,631 15,312 Current ratio (x) 5.1 4.5 4.0 4.0
Provisions 1,349 1,416 1,487 1,561 Quick ratio (x) 5.1 4.5 4.0 4.0
Total current liabilities 9,937 11,014 14,117 16,873 Interest cover (x) 39.7 45.8 75.0 92.8
Total Debt 2,955 2,955 2,955 2,955 Dividend cover (x) - - - -
Deferred Tax Liabilities 519 519 519 519 Total debt/Equity (%) 0.0 0.0 0.0 0.0
Total liabilities 13,411 14,489 17,592 20,347 Net debt/Equity (%) (0.2) (0.1) (0.1) (0.1)
Paid-up capital 6,478 6,478 6,478 6,478 Valuation
Reserves & surplus 1,16,575 1,31,658 1,56,493 1,88,491 PER (x) 184.4 142.5 86.5 67.2
Shareholders’ equity 1,23,053 1,38,136 1,62,971 1,94,969 PEG (x) - y-o-y growth 10.2 6.1 2.3 1.4
Total equity & liabilities 1,36,464 1,52,625 1,80,563 2,15,316 Price/Book (x) 17.5 15.6 13.2 11.0
Source: DMart, PhillipCapital India Research Estimates Yield (%) - - - -
EV/Net sales (x) 8.9 7.0 4.9 3.9
EV/EBITDA (x) 122.1 89.7 55.3 42.8

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Stock Price, Price Target and Rating History

3500

3000
B (TP 3320)

B (TP 3320)
2500

2000

1500

1000

500

0
J-18 A-18 D-18 F-19 M-19 A-19 N-19 F-20 M-20 A-20 N-20 F-21 M-21

Rating Methodology
We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one
year. We have different threshold for large market capitalisation stock and Mid/small market capitalisation
stock. The categorisation of stock based on market capitalisation is as per the SEBI requirement.

Large cap stocks

Rating Criteria Definition
BUY >= +10% Target price is equal to or more than 10% of current market price
NEUTRAL -10% > to < +10% Target price is less than +10% but more than -10%
SELL <= -10% Target price is less than or equal to -10%.

Mid cap and Small cap stocks

Rating Criteria Definition
BUY >= +15% Target price is equal to or more than 15% of current market price
NEUTRAL -15% > to < +15% Target price is less than +15% but more than -15%
SELL <= -15% Target price is less than or equal to -15%.

Disclosures and Disclaimers

PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group.
This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at
times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.
This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd.
References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for
information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as
solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in
the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such
information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer
any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or
her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements
and past performance is not necessarily an indication of future performance.
This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report.
Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness
of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future

Page | 18 | PHILLIPCAPITAL INDIA RESEARCH

 AVENUE SUPERMARTS COMPANY UPDATE

prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the
securities mentioned within it. The information contained in the research reports may have been taken from trade and statistical services and other sources,
which PCIL believe is reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate
or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice.
Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research
report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is
available on request.
Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the
research analyst’s personal views about all of the subject issuers and/or securities, that the analyst(s) have no known conflict of interest and no part of the
research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.
Additional Disclosures of Interest:
Unless specifically mentioned in Point No. 9 below:
1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the DMart(ies) covered in this
report.
2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the
DMart (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report.
3. The Research Analyst, his/her associate, his/her relative, and PCIL, do not have any other material conflict of interest at the time of publication of this
research report.
4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for
any other products or services from the DMart(ies) covered in this report, in the past twelve months.
5. The Research Analyst, PCIL or its associates have not managed or co-managed in the previous twelve months, a private or public offering of securities for
the DMart (ies) covered in this report.
6. PCIL or its associates have not received compensation or other benefits from the DMart(ies) covered in this report or from any third party, in connection
with the research report.
7. The Research Analyst has not served as an Officer, Director, or employee of the DMart (ies) covered in the Research report.
8. The Research Analyst and PCIL has not been engaged in market making activity for the DMart(ies) covered in the Research report.
9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Sr. no. Particulars Yes/No

1 Whether compensation has been received from the DMart(ies) covered in the Research report in the past 12 months for No
investment banking transaction by PCIL
2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% of No
the DMart(ies) covered in the Research report
3 Whether compensation has been received by PCIL or its associates from the DMart(ies) covered in the Research report No
4 PCIL or its affiliates have managed or co-managed in the previous twelve months a private or public offering of securities for the No
DMart(ies) covered in the Research report
5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking or No
brokerage services or for any other products or services from the DMart(ies) covered in the Research report, in the last twelve
months

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment
banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek
compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the
securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any
of the securities covered in the report.
Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or
particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors.
Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and
accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The
value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or
political factors. Past performance is not necessarily indicative of future performance or results.
Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be
reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not
be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material, and are subject to change without notice.
Furthermore, PCIPL is under no obligation to update or keep the information current. Without limiting any of the foregoing, in no event shall PCIL, any of its
affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind
including but not limited to any direct or consequential loss or damage, however arising, from the use of this document.
Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No
reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only
and only if it is reprinted in its entirety.
Caution: Risk of loss in trading/investment can be substantial and even more than the amount / margin given by you. Investment in securities market are
subject to market risks, you are requested to read all the related documents carefully before investing. You should carefully consider whether
trading/investment is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. PhillipCapital and any of
its employees, directors, associates, group entities, or affiliates shall not be liable for losses, if any, incurred by you. You are further cautioned that
trading/investments in financial markets are subject to market risks and are advised to seek independent third party trading/investment advice outside
PhillipCapital/group/associates/affiliates/directors/employees before and during your trading/investment. There is no guarantee/assurance as to returns or
profits or capital protection or appreciation. PhillipCapital and any of its employees, directors, associates, and/or employees, directors, associates of

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 AVENUE SUPERMARTS COMPANY UPDATE

PhillipCapital’s group entities or affiliates is not inducing you for trading/investing in the financial market(s). Trading/Investment decision is your sole
responsibility. You must also read the Risk Disclosure Document and Do’s and Don’ts before investing.
Kindly note that past performance is not necessarily a guide to future performance.
For Detailed Disclaimer: Please visit our website www.phillipcapital.in

IMPORTANT DISCLOSURES FOR U.S. PERSONS

This research report is a product of PhillipCapital (India) Pvt. Ltd. which is the employer of the research analyst(s) who has prepared the research report.
PhillipCapital (India) Pvt Ltd. is authorized to engage in securities activities in India. PHILLIPCAP is not a registered broker-dealer in the United States and,
therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided
for distribution to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act
of 1934, as amended (the “Exchange Act”). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this
report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not a
Major Institutional Investor.
Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information
provided in this research report should do so only through Rosenblatt Securities Inc, 40 Wall Street 59th Floor, New York NY 10005, a registered broker dealer
in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial
instruments through PHILLIPCAP. Rosenblatt Securities Inc. accepts responsibility for the contents of this research report, subject to the terms set out below,
to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor.
The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority
(“FINRA”) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to applicable restrictions under FINRA Rules on
communications with a subject DMart, public appearances and trading securities held by a research analyst account.

Ownership and Material Conflicts of Interest

Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of
the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers, directors or employees may have
interests, or long or short positions, and may at any time make purchases or sales as a principal or agent of the securities referred to herein. Rosenblatt
Securities Inc. is not aware of any material conflict of interest as of the date of this publication

Compensation and Investment Banking Activities

Rosenblatt Securities Inc. or any affiliate has not managed or co-managed a public offering of securities for the subject DMart in the past 12 months, nor
received compensation for investment banking services from the subject DMart in the past 12 months, neither does it or any affiliate expect to receive, or
intends to seek compensation for investment banking services from the subject DMart in the next 3 months.

Additional Disclosures
This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no regard to the specific
investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single recipient. This research report is not
guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to in this research report. Neither
PHILLIPCAP nor any of its directors, officers, employees or agents shall have any liability, however arising, for any error, inaccuracy or incompleteness of fact or
opinion in this research report or lack of care in this research report’s preparation or publication, or any losses or damages which may arise from the use of
this research report.
PHILLIPCAP may rely on information barriers, such as “Chinese Walls” to control the flow of information within the areas, units, divisions, groups, or affiliates
of PHILLIPCAP.
Investing in any non-U.S. securities or related financial instruments (including ADRs) discussed in this research report may present certain risks. The securities
of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on such non-U.S.
securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory
requirements comparable to those in effect within the United States.
The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other
than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related
financial instruments.
Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by PHILLIPCAP with respect
to future performance. Income from investments may fluctuate. The price or value of the investments to which this research report relates, either directly or
indirectly, may fall or rise against the interest of investors. Any recommendation or opinion contained in this research report may become outdated as a
consequence of changes in the environment in which the issuer of the securities under analysis operates, in addition to changes in the estimates and forecasts,
assumptions and valuation methodology used herein.
No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior written consent of
PHILLIPCAP and PHILLIPCAP accepts no liability whatsoever for the actions of third parties in this respect.

PhillipCapital (India) Pvt. Ltd.

Registered office: 18th floor, Urmi Estate, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai – 400013, India.

ANKIT Digitally signed by ANKIT ANILKUMAR KEDIA

DN: c=IN, o=PHILLIPCAPITAL (INDIA) PRIVATE LIMITED, ou=EQUITY

ANILKUMAR
RESEARCH,
2.5.4.20=0626bc44fa4f4d447b8a707b26b8373e49e4706f6f412eaa27d
a43d244d5faa2, postalCode=400013, st=Maharashtra,
serialNumber=2da49c659b9f8e0d88142ea5fa621f46f0de4b7c9d9410
c42248cc4f70b27992, cn=ANKIT ANILKUMAR KEDIA

KEDIA
Date: 2021.06.20 19:45:01 +05'30'

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