Stock advisory Company, Strong earnings growth unlikely to trigger rally in expensive D-Mart

Avenue Supermarts, owner of the D-Mart retail chain, reported a 47% year-onyear rise in its earnings for the March quarter, on a 41% increase in sales. This was the company's first results announcement after the listing of the stock, and the earnings met the Street's high expectations. The strong earnings and sales growth may not result in any sharp rally in the shares, as they are trading expensive -at 94 times trailing earnings. The current valuations have factored in the long-term growth sustainability.

For the entire year, the retailer reported revenues of Rs 11,912 crore, EBIDTA (earnings before interest tax and depreciation) of Rs Rs 995 crore, and a net profit of Rs 483 crore. 

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