cafeconomics

Avenue Supermarts Ltd (D-Mart) continues to outperform quarter after quarter and year after year. In the most recent quarter ended on Dec 2019, it has registered revenues of Rs. 68,069.30 millions, growth rates of 24.38% and 13.66% when compared to revenues of Dec 2018 and Sep 2019 respectively. In the last three quarters, net profit margins have been hovering around the 5.5% mark, notwithstanding the growth in revenues, as shown in the figure below. In the last five years, revenues have grown at an impressive CAGR of 25.45% and gross margins have been consistently maintained at 14 to 15%. In the current financial year 2019-20, 20 stores have been added and the total number of stores is 196 as of Dec 2019 as reported in D-Mart investor presentation. Notwithstanding, the rise in the number of stores, revenue per square feet has been increasing year after year as shown in the figure below. (D-Mart Investor Presentation Jan 2020) Key Financial Ratios of Avenue Supermarts Profitability Rat...

In a recent address at the National Retail Federation in New York, Microsoft CEO Satya Nadella remarked that by capturing the commercial intent and buying behaviour of consumers, retail industry is going to set the tone for not just for consumer experience but also the global economy in the coming decade. https://www.youtube.com/watch?v=vkSNW6CJN7Q&t=835s As of FY end 2018-19 India's private consumption expenditure stood at $1.6 trillions which is 60% of India's GDP. Retail industry accounts for $857 billions out of the total private consumption expenditure. (Reference: D-Mart Investor's Presentation/Crisil Report Jan 2020/CEIC Data) Effectively, retail industry accounts for 25 to 30 % of India's GDP. Not just India, for most major economies retail industry accounts for a significant share of GDP. Driven by technology and modernisation, the retail sector in India is at the cusp of evolution. Disruptions throughout the value chain – sourcing, manufacturing, ...

This is a descriptive article based on the data set provided Prof. Damodaran on this website http://pages.stern.nyu.edu/~adamodar/ . The objective is to provide a reference point for cost of equity for Indian companies specially for retail investors. It is already known that cost of equity (using CAPM model) becomes a critical input to evaluate risk from an equity investor stand point of view in corporate finance and valuation. Given below is the link to the spreadsheet containing the cost of equity for Indian companies by sector.   https://drive.google.com/open?id=1pSH_ElsNh_psnwHn3N9wwbiwsbPjCXwn The rest of this article is devoted to describing some of the trends in cost of equity for Indian companies. For the market as a whole there is not much of a difference in terms of cost of equity between 2019 and 2020. The overall cost of equity for the market as a whole as of Jan 2020 is 10.16%  as against 10.21% of 2019. Advertising, electronics, oil/gas and dining industry are am...