HSBC has downgraded to Avenue Supermarts to “reduce”, from its earlier rating of “hold.” The brokerage has also cut its price target on the stock to ₹3,500 from ₹4,500 earlier, which is one of the lowest targets on the street for the Radhakishan Damani-owned chain of stores. The brokerage had initiated coverage on the stock in October last year with a “hold” recommendation.
The revised price target implies a potential downside of 12.5% from current levels. The stock has already corrected 27% from its all-time high level of ₹5,484.
HSBC wrote in its note that Avenue Supermarts’ Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) during the March quarter was 7% lower than consensus expectations as competition dented margins.
The management also said that margins in mature metro towns will remain soft for a period of time.
As a result, HSBC has cut its Earnings Per Share (EPS) estimates on Avenue Supermarts for financial year 2026 and 2027 by 19% and 21% respectively.
Avenue Supermarts reported EBITDA of ₹955 crore during the March quarter, compared to analysts expecting a range of ₹1,020 crore to ₹1,040 crore.
Out of the 31 analysts that have coverage on Avenue Supermarts, nine analysts each have a “buy” and “hold” rating on the stock, while 13 of them have a “sell” recommendation.
Shares of Avenue Supermarts ended 0.4% lower on Tuesday at ₹4,002. The stock has remained flat over the last one month, but has gained 12% so far in 2025.
