Tag: Radhakishan Damani

VST Industries shares rise after Radhakishan Damani increases stake in one of his major holdings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Veteran investor and promoter of Avenue Supermarts Ltd., Radhakishan Damani increased his stake in cigarette manufacturer and distributor VST Industries Ltd.

Based on the data available on the exchanges, Radhakishan Damani acquired 2.33 lakh shares of the company, amounting to 1.5% of the total equity in a block deal on Monday. HDFC Mutual Fund was the seller in that transaction, wherein it sold 3.3 lakh shares of the company or 2.1% of the total equity.

HDFC Mutual Fund had sold 2 lakh shares of VST Industries on January 2 this year as well, in which Radhakishan Damani had acquired a 1.44% stake.

Post this block deal, Radhakishan Damani’s stake in the company has increased to 35.85% from 34.34% earlier.

Consequently, HDFC Mutual Fund’s stake in VST Industries has declined to 2.5% currently from 5.8% in December and 6.8% in September last year.

Shares of VST Industries have been flat over the last month and have risen 9% so far in 2024.

Recovery in cigarette volumes and market share is a key factor to watch out for on the stock. Another factor is whether HDFC Mutual Fund and other domestic institutions will sell more shares of the company in the future?

Based on the December quarter shareholding pattern, 10 domestic funds held a 15.93% stake in VST Industries, prominent among them being Axis Mutual Fund, SBI Small Cap Fund and DSP Small Cap Fund.

Lastly, another key trigger for the stock will be whether Radhakishan Damani and his family intends to buy more stake in the company.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Radhakishan Damani’s Avenue Supermarts gets a 26% upside projection from this analyst

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Brokerage firm CLSA has initiated coverage on Radhakishan Damani’s hypermarket chain D-Mart’s parent Avenue Supermarts with a “buy” recommendation.

CLSA has projected a price target of ₹5,107 on the stock, implying a potential upside of 26% from Wednesday’s closing levels. CLSA’s target is the highest on the street for Avenue Supermarts among the 26 analysts who track the stock.

CLSA expects D-Mart’s stores to triple by the financial year 2034 from the current 341 as the chain expands its presence in new states and those it is already present in.

The brokerage cited the opportunity of an addressable market over $500 billion, but less than 5% of which is organised. It further mentioned that D-Mart has the lowest consumer prices due to its lowest operating costs.

CLSA also expects private labels to drive the next leg of gains for Avenue Supermarts’ stock going forward.

Promoted by Radhakishan Damani and his family, DMart retails basic home and personal products across markets, which include Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan.

Out of the 26 analysts that track the stock, 11 of them have a “buy” recommendation, while six of them say “hold.” Nine analysts have a “sell” rating on the stock.

Avenue Supermarts shares were trading 2.7% higher at 4,166.2 apiece at 1.30 pm on March 21. The stock has gained 25.06% in the past year.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Radhakishan Damani now owns more than 30% of VST Industries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Veteran investor and owner of D-Mart Radhakishan Damani has increased his stake in cigarette manufacturer VST Industries on Tuesday via a block deal.

Data revealed that Damani had acquired 2.22 lakh shares of the company or 1.44% of the total outstanding shares in the block deal that took place in VST Industries on Tuesday.

Damani is already the single largest shareholder in VST Industries. Based on the December quarter shareholding pattern, Derive Trading and Resorts Pvt. Ltd. and Bright Star Investments Pvt. Ltd., entities owned by Damani, held 4.76% and 25.95% stake in VST Industries respectively.

Promoters of VST Industries 32.16% of the company.

Shares of VST Industries had ended 20% higher on Tuesday after 4% equity had exchanged hands around noon in a large trade.

Another buyer in the transaction was SBI Mutual Fund, which acquired 2.25 lakh shares of the company. HDFC Mutual Fund and DSP Mutual Fund were the sellers in the block deal.

As of December, HDFC Mutual Fund held 6.81% stake in VST Industries, while DSP MF owned 2.4% via its Small Cap Fund.

VST Industries, known for manufacturing and selling cigarettes under brands like Charms and Charminar, has been experiencing a decline in market share compared to ITC in recent quarters.

VST Industries has also lagged ITC in recent quarters when it comes to cigarette volume growth.

Shares of VST Industries underperformed its largest peer ITC in 2023. While the former was largely flat, shares of ITC gained nearly 40% last year.

When compared on the valuation front, VST Industries is currently trading at 15 times financial year 2025 earnings, while ITC is trading at 26 times.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The billionaire who built $30 billion worth retail business in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Veteran Mumbai investor Radhakishan Damani became India’s retail king after the March 2017 Initial Public Offering (IPO) of his supermarket chain Avenue Supermarts. Since its listing, the stock rewarded 515 percent returns to its investors and the retail chain is now worth $30 billion.

According to Forbes, Damani’s net worth is $15 billion ranking 114 globally, as of 4th April 2023. Some of the other prominent Indian billionaires in the list are Mukesh Ambani (9th position), Gautam Adani (24th position), Shiv Nadar (55 position), Cyrus Poonawalla (68 position), Lakshmi Mittal (93 position), Savitri Jindal and family (94 position).

He is touted to be a mentor to billionaire investor Rakesh Jhunjhunwala. Majority of his portfolio is divided among Retail, Power – Generation & Distribution, Breweries & Distilleries, Computers – Software – Training, Finance – Leasing & Hire Purchase, Hotels, Cement – Major, Couriers, Cigarettes, Finance – General, Paper, Chemicals and other Diversified. Damani also holds stakes in a range of companies, from tobacco firm VST industries to cement producer India Cements.

However, the billionaire always maintains a low profile and rarely makes appearances at public events and avoids speaking to the press.

Damani got into retailing business in 2002 with one store in suburban Mumbai and has grown into a chain selling everything from grocery to apparel to footwear. But apart from this role, he is also an investor who manages his portfolio through his Investment firm, Bright Star Investments Limited.

Avenue Supermarts is one of the largest food and grocery retailers in India. DMart took eight years to start its first ten stores. This wasn’t because of dearth of investment opportunities, but more because Damani believed in validating the business model from both profitability and scalability. Today, DMart is a successful grocery retail chain in India, focusing primarily on the value segment, operating with a mission to be the lowest priced retailer in the area of operation or city.

The company which opened its first store in Mumbai in 2002, has 327 operating stores with Retail Business Area of 13.5 million sq. ft across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab as of 30th June 2023.

However, the current business environment is challenging with a slow pick up in discretionary spends. The gross margins of DMart continue to remain under pressure due to weak product mix. However, the revenue/sqft and revenue/store improved 4 percent and 5 percent year on year in the first quarter of FY24. Street expects the current weakness in business environment to be cyclical and henceforth, a solid Earnings Per Share (EPS) growth is anticipated on improving general merchandise sales.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

DMart shares can rise 9% amid in-line revenue growth — what should investors do?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Dalal Street veteran Radhakishan Damani-owned Avenue Supermarts, which runs the DMart chain of retail stores, were trading almost flat during Tuesday’s noon deals, a day after the company posted its June quarter business update. At 3 pm, the scrip was trading 0.30 percent lower at Rs 3,857.20 apiece on the NSE.

In the last one month, DMart shares gained 9.13 percent while it tumbled 5.23 percent on a year-to-date basis. Analysts at Motilal Oswal are positive about the stock, with a target price of Rs 4,200, implying a potential upside of 9 percent on the counter from the current market levels.

In terms of technicals, the 14-day relative strength index (RSI) stood at 57.5, implying the stock is neither oversold nor overbought. Money flow index (MFI) was at 64.6. DMart shares are trading higher than 20 day, 50 day, 100 day and 200 day moving averages.

The company reported Rs 11,584 crore standalone revenue for the first quarter ending June, which when compared to the January-March quarter, implies growth of 12.1 percent.

The company has added three stores during the quarter under review, taking the total store count to 327 at the end of June. On a year-on-year basis, store addition grew at 11.2 percent.

With revenue growth exceeding the growth in store addition during the quarter, it implies a positive same-store sales growth for the company during the quarter. The exact figures for the same will be available only during Avenue Supermarts’ quarterly results.

“Weak SSSG (same-store sales growth) has weighed on DMart’s stock price performance in the recent past,” domestic brokerage house Motilal Oswal wrote in its note earlier.

Aside from the same-store sales growth, what would also be important to track in the quarterly results would be the product mix, and whether that has contributed to any potential margin improvement during the quarter.

RK Damani has earned the big bucks from the stock over the years from value investing. As of March 2023, Damani held a 23.12 percent stake or 149,848,238 shares in the company.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Radhakishan Damani portfolio stock rises 3% after Motilal Oswal upgrades stock to buy. Do you own?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Dalal Street veteran Radhakishan Damani-owned Avenue Supermarts, which runs the DMart hypermarket chain of retail stores, jumped 3 percent in Friday’s trade after analysts at Motilal Oswal upgraded the stock to ‘Buy’, with a target price of Rs 4,200 per share, implying an upside potential of 18 percent from the current market levels. At 1:06 pm, the scrip was trading 2.65 percent higher at Rs 3,640.95 level.

DMart shares rose 3.03 percent in the last five trading sessions, while it fell 11 percent on a year-to-date basis. The stock was up 11 percent from its 52-week low of Rs 3292.65, hit on March 16, 2023.

In the last five years, the stock has traded at 60 times EV (enterprise value) or EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and 99 times PE. After a 25 percent correction since Sept 2022, DMart is now trading at 36 times EV or EBITDA and 58 times PE (Price-to-Earnings) on FY25E, which represents a 30 percent discount to historical multiples.

DMart has grown its revenues and earnings at a robust compound annual growth rate (CAGR) of 23 percent and 24 percent over the last five years. After growing the topline at this scorching pace and achieving a turnover of Rs 43,000 crore, it has just about scratched the surface, according to Motilal Oswal.

“We believe it has a long runway for growth as the modern retail space is still in its infancy in India. Weak SSSG (same store sales growth) has weighed on DMart’s stock price performance in the recent past,” the brokerage said.

Competitive position intact

Despite the recent aggressiveness of online or quick commerce platforms, DMart remains one of the most competitive grocery retailers, along with JioMart (Reliance Fresh), with 6 percent lower pricing consistently over the last 12 months.

As per our monthly grocery price monitor, in May 2023, DMart at Rs 8,500 (basket value) was marginally above JioMart but was 8 percent cheaper than the pure-play online retailers (such as Zepto, Dunzo, Big Basket, etc.) highlighting its cost competiveness against the aggressive online players.

As per the brokerage’s price monitor, four times in the last 12 months, it had the cheapest basket value with the widest breadth of the lowest price products. This looks commendable, as DMart has protected its margins, yet maintaining its competitive edge.

Strong footprint addition in last few years

While most retailers found it difficult to expand their footprint in the last three years due to Covid-19, DMart, despite operating on an ownership model, clocked a strong 20 percent CAGR in area addition over FY20-23, translating into 19 percent revenue growth.

However, SSSG was weak due to the addition of big stores in the last few years average store size up 23 percent over FY19-23, which pulled down store productivity; and weak discretionary demand in the value category, which reduced its share to 23 percent from 27 percent in FY20.

However, the brokerage believes SSSG is set to recover in FY24, due to the following factors easing general inflation, along with RM cost reduction, may help to revive discretionary demand; a change in the company’s store strategy — earlier smaller 30-35k square feet stores would mature in 3-4 years and see their SSSG peak out, so the company has started to open larger stores since FY19/20, which continue to contribute even after completing their 3-4 year cycles. Those stores are now in the base and will start contributing to store productivity, with further room to grow footfalls.

RK Damani has earned the big bucks from the stock over the years from value investing and his multibagger brain chain Avenue Supermarts or popularly known as DMart. As of March 2023, Damani held a 23.12 percent stake or 149,848,238 shares in the company.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The challenges that lie before Radhakishan Damani-owned DMart after stock falls 30% from peak

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Avenue Supermarts, the company behind hypermarket chain DMart, owned by billionaire investor Radhakishan Damani, have corrected 30 percent from their peak in October 2021.

Although the stock continues to remain significantly higher than its IPO price of Rs 299, the recent correction dampens the 18x returns it delivered to shareholders from its IPO until October 2021.

Billionaire investor Radhakishan Damani, who currently has a networth of Rs 1.5 lakh crore, continues to hold a 75 percent stake in DMart through a combination of individual as well as other promoter entities. On an individual basis, he owns 23.1 percent of the company, currently valued at over Rs 53,000 crore.

From its peak, the stock is down 31 percent, and has underperformed the benchmark Nifty 50 index and the Nifty Midcap index.

DMart positions itself as a value retailer, selling everyday products at lower prices. It categorises itself into three categories – Foods, non-foods, and general merchandise.

Demand at the lower end of the spectrum has remained very week post the Covid-19 pandemic, as highlighted by many economists and FMCG companies. That is DMart’s core audience. Higher prices of food, fuel and other essential goods have squeezed household budgets.

As a result, consumers have cut back on discretionary spending. Economists and experts have been talking of a “K-shaped” recovery.

Amidst the tough macroeconomic conditions, the street is also worried about these factors:

Pace Of Store Addition

DMart has been adding stores at a slower pace. Between financial year 2019 and financial year 2023, the company has added a total of 171 stores, taking the total store count to 324.

In contrast, competitor Reliance Retail has added 966 stores, which is triple of DMart’s overall stores in the March quarter itself. Reliance Retail added 3,300 stores in financial year 2023.

Another worrying factor is that DMart’s sales per square feet has declined from Rs 35,647 in financial year 2019 to Rs 31,096 in financial year 2023.

Lower Contribution From High Gross Margin Business

The Reserve Bank of India released its bi-monthly Consumer Confidence Survey last month, which said that while consumer confidence continues to recover from historic lows of mid-2021, it still has some way to go.

But consumers are looking to spend less on apparel and merchandise, which is reflecting in lower contribution of general merchandise and apparel to DMart’s revenue. This metric has also been on a downward trajectory since financial year 2019.

The company is also facing increased competition from other retailers in the general merchandise and apparel segment. This is a high gross margin segment DMart. Gross margin is the percentage of the revenue left after subtracting the company’s direct cost.

The declining contribution of this segment to DMart’s revenue meant that gross margin in the March quarter fell to a seven-quarter low.

RoCE Remains Below Pre-Covid Levels

DMart may have not added as many stores as its peer, but it has added them nonetheless. As a result of the increased infrastructure, and lower gross margin, the company’s Return on Capital Employed (RoCE) has still not recovered past its pre-Covid levels. Return on Capital Employed is a ratio used in analysing how well a company generates profit from the capital it puts to use.

DMart Ready Expansion

DMart has been ramping up its hypermarket chain DMart Ready in recent months. The revenue run-rate for DMart Ready has increased from Rs 153 crore in the December quarter of financial year 2022 to Rs 257 crore for the March quarter this year. However, the revenue run rate has been flat on a sequential basis for the last few quarters.

Expensive Valuations

Unlike the products that it sells in its stores, DMart’s shares trade at extremely expensive valuations. Despite the recent correction, shares are trading at 74 times financial year 2024 price-to-earnings and 59 times for the same metric in financial year 2025. For all the promise of strong fundamentals and growth prospects, the valuation is still very expensive.

Despite the recent challenges, DMart remains a strong company with a loyal customer base. However, investors will need to keep an eye out on the above-mentioned factors in the coming months.

DMart will have to show that it can grow its revenue and improve its product mix. It also needs to improve its sales per square foot. The street can factor in better performance if it manages to accelerate its pace of store addition. Among the new businesses, the ramp-up of DMart Ready and in-store pharma services will be key to watch.

In case it manages to overcome these challenges, it is well positioned to return to its growth trajectory of the past.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Radhakishan Damani sells entire stake in this largecap stock — shares slip 3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Ace investor Radhakishan Damani’s investment arm Derive Trading and Resorts has offloaded 1.19 percent stake, or 3,136,536 shares, in United Breweries for the March 2023 quarter (Q4FY23), the latest shareholding pattern filed by the company suggests.

Damani, who was among the key shareholders of the company for at least 28 quarters in a row, sold his entire stake in the brewery and distillery giant for around Rs 437.8 crore.

On Friday, May 5, the stock settled 2.44 percent lower at Rs 1,395.20 per share. On a year-to-date basis, the stock has fallen 17.28 percent, while plunging about 5 percent in the last one week. The company’s market cap stood at Rs 36,984.99 crore as of Friday’s close.

According to data from Trendlyne, the average target price of the stock is Rs 1,650. This shows an upside potential of 18 percent from the current market price.

United Breweries Q4 update

United Breweries has reported a decline of 93.97 percent in its consolidated net profit at Rs 9.87 crore for the fourth quarter. The company had posted a net profit of Rs 163.78 crore in the January-March quarter a year ago.

However, the company’s revenue from operations rose 11.35 percent to Rs 4,081 crore during the reporting quarter. It stood at Rs 3,665 crore in the corresponding quarter of FY22.

“Gross margin during the quarter was lower as compared to PY (previous year) due to continued inflationary pressures on our cost base, particularly on prices of barley and packaging materials,” UBL said in a statement.

Bengaluru-based United Breweries markets beer under the Kingfisher brand and owns various other brands of alcoholic beverages. It has 32 units across the country. Its products are also available in over 60 countries across the globe.

As per corporate shareholdings filed for March 31, 2023, Radhakishan Damani publicly holds 15 stocks with a net worth of over Rs 153,987.2 crore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow