Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.</p>

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite being capital intensive (follows ownership model) Robust store operating metrics (breakeven in 18-24 months of its operations...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite being capital intensive (follows ownership model) Robust store operating metrics (breakeven in 18-24 months of its operations...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Avenue Supermarts: Sharp Revenue Recovery Post Easing of Restrictions

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>The revenue recovery in DMART has been much better than that during the previous lockdown, growing 33% YoY (13% below pre-COVID levels). Gross margin declined by 110bp YoY, despite the base quarter having seen a...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

The revenue recovery in DMART has been much better than that during the previous lockdown, growing 33% YoY (13% below pre-COVID levels). Gross margin declined by 110bp YoY, despite the base quarter having seen a...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gross margin disappoints amid a steady revenue recovery

<p>Accelerated store addition to spur revenue growth the D-Mart' brand with a core focus on value retailing. D-Mart, through its proven business model, has been able to maintain consistent profitability and remains an exceptional performer in its peer group. D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Accelerated store addition to spur revenue growth the D-Mart' brand with a core focus on value retailing. D-Mart, through its proven business model, has been able to maintain consistent profitability and remains an exceptional performer in its peer group. D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Axis Direct

Axis Direct

<p>We believe is fairly valued given store revenue growth while store expansion may moderate in the near to medium term due to the pandemic-induced uncertainties and consequent lockdown restrictions. We increase our target price to Rs 3,110/share (prev - Rs 2,890/share) valuing at 40x FY24E EV/EBITDA</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We believe is fairly valued given store revenue growth while store expansion may moderate in the near to medium term due to the pandemic-induced uncertainties and consequent lockdown restrictions. We increase our target price to Rs 3,110/share (prev - Rs 2,890/share) valuing at 40x FY24E EV/EBITDAContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India

Avenue Supermarts Ltd. (ASL) owns and operates hypermarkets and supermarkets. The Company offers products such as garments, footwears, toys and games, bed and bath linen, stationery, grocery, household, and electronic products. ASL operates throughout India.

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Avenue Supermarts Ltd (DMART IN)

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Avenue Supermarts: Sharp Revenue Recovery Post Easing of Restrictions

D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite being capital intensive (follows ownership model)

ICICI Securities Limited

Gross margin disappoints amid a steady revenue recovery

The revenue recovery in DMART has been much better than that during the previous lockdown, growing 33% YoY (13% below pre-COVID levels). Gross...

Motilal Oswal

Avenue Supermarts Ltd

Accelerated store addition to spur revenue growth the D-Mart' brand with a core focus on value retailing. D-Mart, through its proven business...

ICICI Securities Limited

Result Update:Avenue Super.

We believe is fairly valued given store revenue growth while store expansion may moderate in the near to medium term due to the pandemic-induced...

Axis Direct

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