Recommendations from Retail & IT Services Sectors
The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
Avenue Supermarts Limited
CMP - ₹ 4,092.50
BSE CODE : 540376
Volume : 18,078
Face Value : ₹ 10
Target :₹ 4,275
Stoploss : ₹3,950 (CLS)
Avenue Supermarts Ltd, is a Mumbai-based supermarket chain branded as D-Mart. It offers customers a wide range of basic home and personal products under one roof. Its core objective is to offer customers good products at a great value with attractive discounts. On a quarterly basis, the consolidated numbers of the company reported net sales and operating income at ₹ 9,217.76 crore in Q3FY22, a significant increase from ₹ 7,542.00 crore reported in Q3FY21. The operating profit of the company in Q3FY22 was ₹ 892.42 crore as compared to ₹ 734.44 crore, up by 21.51 per cent. It reported net profit at ₹ 552.53 crore in Q3FY22 as against net profit of ₹ 446.95 crore reported in Q3FY21, a remarkable increase of 23.62 per cent. D-Mart is India’s most profitable low-cost retailer. The brand has been able to maintain consistent profitability and has performed exception- ally in its peer group. Furthermore, strong additions of retail stores and higher sales value due to inflation will also support strong growth when the economy normalises. Hence, we recommend BUY.
Affle (India) Limited
CMP - ₹ 1,226.35
BSE CODE 542752
Volume 89,306
Face Value ₹ 2
Target ₹ 1,368
Stoploss ₹ 1,110 (CLS)
Affle (India) Ltd. provides market consulting services. The company functions through a consumer intelligence platform that provides user engagement and transactions through mobile advertising. The company recorded a huge jump of 125.54 per cent in net sales and operating income from ₹ 150.48 crore in Q3FY21 to ₹ 339.40 crore in Q3FY22. The operating profit also improved from ₹ 39.80 crore in Q3FY21 to ₹ 82.12 crore in Q3FY22. The quarter resulted in an escalation of net profit from ₹ 30.69 crore in Q3FY21 crore to ₹ 62.29 crore in Q3FY22. Since Google has plans to adopt new privacy initiatives (termed Privacy Sand- box) to limit tracking across apps on Android smart phones. Affle (India)’s successful growth post iOS privacy change lends further confidence. The company reported its highest-ever revenue growth of 126 per cent YoY driven by a 91 per cent increase in the number of converted users, 26 per cent growth in cost per converted user (CPCU)) and positive seasonality. Hence, we recommend BUY.
(Closing price as of Feb 21, 2022)