✍️ United Breweries Ltd & Avenue Supermarts Ltd : Nuvama Institutional Equities.

✅ Leadership Transition: The leadership change at DMart was slightly unexpected but not a major concern. The new MD has a similar pedigree, and the outgoing leader will have time to groom the successor.
✅ Strong Foundation: DMart is well-run with a strong template, and the promoter and team are well-placed.
✅ Sales Growth: DMart has shown robust top-line growth despite margin pressures.
✅ Compounding Machine: DMart is recognized as a good compounding machine, indicating long-term growth potential.
✅ Positive Outlook for UBL: United Breweries is expected to see a positive outcome from its bold move in Telangana, with potential for pricing growth and profitability improvement.

⚠️ But, Watch Out For:

❎ Margin Contraction: DMart's margins saw contraction due to high promotional intensity and competition from players like Sui Zato and Zepto.
❎ Near-term Margin Pressure: Near-term margins are expected to remain under pressure due to industry challenges.
❎ Disruption in UBL: Near-term disruptions in United Breweries due to the Telangana issue could impact numbers, though long-term potential remains strong.
❎ Urban Demand Challenges: Urban demand is currently challenging, with potential risks from inflation and raw material costs impacting margins.

💡 Guidance:

🎯 DMart: Near-term margin compression is expected, but the long-term outlook remains positive due to its strong foundation and compounding ability.
🎯 UBL: Despite near-term disruptions, the bold move in Telangana is expected to lead to positive outcomes, with pricing growth and profitability improvements on the horizon.
🎯 Consumer Sector Recovery: Gradual recovery is expected in the consumer sector, with pricing growth and market share gains anticipated. However, risks from inflation and raw material costs remain.

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