CLSA has maintained its “high conviction outperform” rating on Avenue Supermarts, with a price target of ₹6,185 per share. This implies an upside potential of 58.5% from its previous closing price of ₹3,903.2 apiece.
CLSA said DMart opened nine new stores over the last three days, taking its total store count to 481.
With this, its total store additions for the year stand at 66, with two days remaining in the quarter and the financial year. This is already a 10% increase from the initial expectations of 60 stores to be opened for the year, as per CLSA.
For the fourth quarter, DMart has already opened 39 stores with two days left compared to 28 stores over the same period last year.
Avenue Supermarts reported a strong set of earnings in the third quarter. The company’s net profit was up 17% at ₹856 crore from the previous year, its revenue increased 13.3% to ₹18,101 crore.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) increased 20.2% to ₹1,463 crore and its EBITDA margin expanded to 8.1% from 7.7% in the year-ago period.
Of the 29 analysts who have coverage on the stock, 10 have a “buy” rating, 11 have a “hold” rating and eight have a “sell” rating.
Shares of Avenue Supermarts recovered around 1.7% from their intraday low and were up 1% at ₹3,942.2 apiece around 10.25 am on Monday. The stock has declined 11.9% in the last six months.
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