Avenue Supermarts, the parent company of retail giant DMart, is once again in the spotlight as leading brokerages revised their stock targets following the company’s announcement of an aggressive store expansion plan. Analysts at leading brokerages have forecasted a potential upside of up to 50 per cent from Wednesday’s closing.
Brokerage reactions mixed but positive on growth
CLSA upgraded its rating on the stock to buy from accumulate, raising its target price to Rs 6,408 from Rs 5,466 — implying a potential upside of nearly 50 per cent.
Morgan Stanley also revised its stance to Equal-weight, increasing its target to Rs 4,552 from Rs 3,350, citing improvements in the company’s growth pipeline.
Meanwhile, JPMorgan and Jefferies maintained neutral and hold ratings, respectively, both assigning a target price of Rs 4,350. They acknowledged the expansion momentum but cautioned about short-term margin pressures.
In contrast, Goldman Sachs maintained a ‘sell’ call, despite raising its target to Rs 3,450 from Rs 3,400. The firm flagged concerns over the impact of accelerated expansion on free cash flow, rising debt, and operational costs. It also noted that DMart is not pivoting toward quick commerce but is instead focused on enhancing in-store experience, which is driving up store costs.
Similarly, HSBC and Citi retained bearish views with target prices of Rs 3,700 and Rs 3,300, respectively, citing high valuations and profitability risks. While Macquarie maintained an ‘underperform’ rating with a target of Rs 3,100.
DMart Stock Performance
Shares of Avenue Supermarts (DMart) ended nearly 7 per cent higher on Wednesday, closing at Rs 4,269 apiece on the NSE.
Despite this recent surge, the stock has declined 13 per cent over the past year but delivered a strong return of over 100 per cent in the last five years.
According to NSE data, here’s how the stock has performed:
1 Month: Up 2.36 per cent
6 Months: Up 16.49 per cent
Year to date (YTD): Up 19.88 per cent
1 Year: Falls by 13.51 per cent
5 Years: Surged 106.89 per cent
(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)
