InterGlobe Aviation, Avenue Supermarts, MRF hit new highs

Shares of Avenue Supermarts, which operates supermarkets under the brand name of D-Mart, InterGlobe Aviation, which operates no-frills carrier IndiGo and tyre major MRF have hit their respective new highs on the BSE after the benchmark indices gaining more than one percentage points on Thursday.

InterGlobe Aviation rallied 4.7% to Rs 1,455, extending its past three days 8% surged after the media report suggested that budget carrier will be able to bid solo for Air India’s 76% stake, while other domestic airlines will have to form a consortium to meet the net worth criteria stipulated by the government.

Analysts at Elara Capital reiterate bullish view on low-cost carriers (LCCs) such as IndiGo and SpiceJet, due to their strong fleet order book to capture strong demand growth. LCCs also have advantage of low non-fuel unit cost, it added.

The brokerage firm expects aviation firms under its coverage (IndiGo, SpiceJet and Jet Airways) to report 14% YoY decrease in their cumulative profit after tax due to anticipated flat yields of IndiGo and 13% YoY increase in unit fuel cost to Rs 1.4/seat-km.

Avenue Supermarts was up 4% to Rs 1,407, its highest level since listing on March 21, 2017. Shares of Radhakishan Damani-led Avenue Supermarts have risen 120% since listing. It zoomed as much as 371% from the issue price of Rs 299 offered at the time of its initial share sale.

Analysts at JM Financial Institutional Securities initiate the coverage on Avenue Supermarts with ‘buy’ rating and 12 month target price of Rs 1,675.

The attractiveness of D-Mart’s operating model stems from the significantly higher level of throughput that its stores generate - nearly 2-3x what other retailers clock on an average, which helps justify its choice of owning the stores (including the cost of land on which they are built), and the discounts (‘Every Day Low Price’ instead of festivals or seasons related limited period discounts) that it pampers its shoppers with – the latter being one of the key drivers of footfalls and conversions for DMart, in our view, the brokerage firm said in a recent report.

MRF too hit a new high of Rs 77,066, gaining 11% in past seven trading sessions. Analyst at Anand Rathi Share and Stock Brokers has ‘buy’ rating on MRF with a target price of Rs 80,045 as the brokerage firm expects better revenue growth and stable rubber prices augur well for MRF’s margin expansion in coming quarters.

Apollo Tyres, Nestle India, SRF and Steel Strips Wheels (SSWL) from the S&P BSE 500 and the S&P BSE Smallcap index hitting their respective record highs in intra-day trade today.