MarketsMOJO Downgrades Avenue Supermarts to 'Sell' Due to Flat Results and High Valuation

Avenue Supermarts, a largecap retail company, has recently been downgraded to a 'Sell' by MarketsMOJO on January 16, 2024. This decision was based on several factors, including the company's flat results in December 2023 and its low debtors turnover ratio of 392.83 times. Additionally, with a ROE of 13.4 and a price to book value of 14.4, the stock is considered to be very expensive.
Furthermore, Avenue Supermarts has underperformed the market in the last year, with a return of only 4.02% compared to the market's 28.61%. The company's profits have also only increased by 3.8% in the past year, resulting in a high PEG ratio of 31.5.

On a positive note, the company has a low debt to equity ratio and has shown healthy long-term growth in net sales and operating profit. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

It is also worth noting that the majority shareholders of Avenue Supermarts are promoters, and the company has the largest market cap in the sector, constituting 53.79% of the entire industry. Its annual sales of Rs 48,656.39 are also nearly half of the industry's total sales.

Overall, based on these factors, MarketsMOJO has downgraded Avenue Supermarts to a 'Sell' and advises investors to carefully consider their options before investing in the stock.