DMart Revenue Boosts Shares
- 03rd January 2025
Aaj Ka Bazaar
The US market varied before ending lower overnight, and the dollar hit a two-year high after data showed that weekly jobless claims unexpectedly dropped to an eight-month low, reigniting worries about high interest rates. The Asian market mainly was higher this morning, with Japanese markets closed for a holiday. Regional gains were driven by optimism surrounding potential interest rate cuts in China and positive news from South Korea’s tech sector. The People’s Bank of China plans to cut interest rates at an appropriate time this year, the Financial Times reported, citing comments from the central bank. Oil extended gains after settling up by more than $1 a barrel on Thursday on optimism around China’s economy and fuel demand after a pledge by President Xi Jinping to promote growth. Indian market may drift lower at open on Friday after US stocks fell for a fifth day running overnight, underscoring a cautious start to the year. However, strong buying was seen in heavyweights, especially auto, NBFCs, and IT stocks, driven by optimism about upcoming quarterly earnings.
Markets Around Us
BSE Sensex –79,445.47 (-0.62%)
Nifty 50 – 24,151.55 (-0.15%)
Bank Nifty – 51,517.40 (-0.17%)
Dow Jones – 42,416.67 (0.05%)
Nasdaq – 19,271.14 (-0.21%)
FTSE – 8,260.09 (1.05%)
Nikkei 225 – 39,894.54 (0.00%)
Hang Seng – 19,823.33 (1.02%)
Sector: Retail
Avenue Supermarts Share Jump 10%
Avenue Supermarts Ltd., which operates the DMart chain, saw its shares rise by 10% on January 3 after releasing its business update for the October-December period of FY2024-25. The company reported a 17.5% increase in revenue, reaching Rs 15,565 crore, compared to the same period last year. As of December 31, DMart had 387 stores. Despite the positive growth, some international brokerages like Macquarie and Morgan Stanley remain cautious about the stock, citing concerns over weaker-than-expected growth compared to historical trends and competition from quick commerce. Morgan Stanley did note that DMart’s Q3 revenue was slightly better than expected, driven by store growth and a 5.5% increase in same-store sales. On the other hand, CLSA is optimistic about DMart, maintaining a strong buy rating and a target price of Rs 5,360 per share, highlighting the company’s strong revenue performance and potential in private labels.
Why it Matters:
Avenue Supermarts’ 10% share surge reflects strong revenue growth, signaling business resilience. Brokerages have mixed views, with some cautious on competition and growth, while others remain optimistic about its potential. This highlights market uncertainty and varying investor confidence in DMart’s future performance.
NIFTY 50 GAINERS
ONGC – 252.31 (2.54%)
HCLTECH – 1990.80 (0.94%)
SBILIFE – 1434.05 (0.83%)
NIFTY 50 LOSERS
HEROMOTOCO – 4199.10 (-2.61%)
HINDALCO – 595.40 (-0.60%)
INFY – 1947.20 (-0.54%)
Sector: Beverages
Varun Beverages Invests Rs 412 Crore in Bevco
Varun Beverages (VBL) has invested Rs 412.8 crore in its South African subsidiary, The Beverage Company (Bevco), by purchasing shares. This investment will help Bevco repay its current debts and strengthen its financial position for future growth. Bevco manufactures and distributes PepsiCo-branded and its own non-alcoholic drinks in South Africa, and also holds PepsiCo franchise rights in Lesotho and Eswatini. VBL, a major bottling partner for PepsiCo, raised funds to support its subsidiaries and business growth. This move follows VBL’s expansion into Africa, with recent acquisitions of two African beverage companies. The company is focusing on growth opportunities in Africa, which it sees as a key market for the next 20 years. Varun Beverages has shown consistent positive returns since its listing, with its stock delivering a 30% return in 2024, and is considered one of Axis Securities’ top picks for 2025.
Why it Matters:
Varun Beverages’ investment strengthens its South African subsidiary, boosting growth and debt repayment. The company is expanding its footprint in Africa, a key growth market. This move signals confidence in VBL’s long-term strategy and enhances its global presence.
Around the World
Most Asian stock markets were up on Friday, driven by strong gains in South Korean shares, while Chinese stocks recovered from early losses due to expectations of new stimulus measures. Japan’s markets were closed for the holidays, leading to lower trading volumes. South Korea’s KOSPI index rose nearly 2%, ending a five-day losing streak, after the government announced policies to attract foreign investment and boost domestic demand amid political and economic challenges. These efforts came as South Korea faces political instability, including the impeachment of President Yoon Suk Yeol. Other regional markets, like the Philippines, Singapore, and Australia, also saw gains, encouraged by South Korea’s recovery. In China, stocks were mixed, but hopes of additional stimulus from the government supported the market. The People’s Bank of China hinted at interest rate cuts in 2025 to further stimulate the economy, following weaker-than-expected manufacturing data for December.
Option Traders Corner
Max Pain
Nifty 50 – 24,100
Bank Nifty – 52,000
Nifty 50 – 24,055 (Pivot)
Support – 23,884, 23,580, 23,409
Resistance – 24,359, 24,530, 24,834
Bank Nifty – 51,423 (Pivot)
Support – 51,174, 50,743, 50,494
Resistance – 51,854, 52,103, 52,534
Did you know?
CSB Bank's Gold Loan Business Sees 36% Growth
CSB Bank’s gold loan portfolio surged to ₹13,018 crore in Q3FY24, reflecting a robust 36.28% increase compared to ₹9,553 crore in the same quarter last year. This growth highlights the bank’s strong performance in the gold loan segment, driven by increased demand for secured lending. The growth trajectory is a positive sign of the bank’s expanding footprint in the lending market, particularly in the context of rising interest in gold-backed financing options.
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