In This Article:
Attractive stocks have exceptional fundamentals. In the case of Avenue Supermarts Limited (NSE:DMART), there’s is a financially-healthy company with a great history and a excellent growth outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Avenue Supermarts here.
Flawless balance sheet with high growth potential
Bullish market analysts are forecasting fast-growing DMART to deliver an exceptional sales growth rate of 69% over the next year. This is expected to flow down into an impressive return on equity of 21% over the next couple of years. DMART delivered a bottom-line expansion of 68% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did DMART outperformed its past performance, its growth also surpassed the Consumer Retailing industry expansion, which generated a 52% earnings growth. This paints a buoyant picture for the company.
DMART’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that DMART manages its cash and cost levels well, which is a crucial insight into the health of the company. DMART’s has produced operating cash levels of 1.66x total debt over the past year, which implies that DMART’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Next Steps:
For Avenue Supermarts, there are three relevant factors you should further research:
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Valuation: What is DMART worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DMART is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does DMART return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from DMART as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DMART? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.