Avenue Supermarts share price declined 6% in the morning trade on July 13 after the company posted a weak set of numbers for the quarter ended June 2020.

The company has reported an 87.6% fall in profit in the June quarter at Rs 40.09 crore versus Rs 323.09 crore reported in the corresponding period last fiscal.

Revenue from operations fell 33.2% Y-o-Y to Rs 3,883.2 crore in the quarter.

At the operating level, earnings before interest, tax, depreciation, and amortization plunged 81.2% YoY to Rs 112 crore and margin dropped significantly by 740 bps to 2.9% in the June Quarter 2020. 

Credit Suisse has maintained an "underperform" rating with a target at Rs 2,000 per share.

According to Credit Suisse, the full impact of COVID led to an 85% profit decline in Q1, while the current run rate s also a concern.

It cut FY21/22 earnings estimates by 13%/8%.

"For 1Q FY21, Avenue Supermarts' top-line de-grew by ~33% YoY to Rs 3,883 crore. Top-line was negatively impacted mainly due to the COVID-19 lockdown. Currently, the company's most of the stores operate at 80% of the pre-COVID sales level. However, discretionary consumption continues to be under pressure, especially in the Non-FMCG categories, "said Amarjeet Maurya, AVP - Mid Caps, Angel Broking.

"On the operating front, the company reported margin contraction, primarily on account of lower sales. The reported net profit de-grew by ~88% YoY to Rs 40 crore due to lower sales and poor operating performance," he added.

At 09:32 hours, Avenue Supermarts was quoting at Rs 2,266.60 down Rs 55.55, or 2.39% on the BSE.