Brokerage firm CLSA has initiated coverage on Radhakishan Damani's hypermarket chain D-Mart's parent Avenue Supermarts with a "buy" recommendation.
CLSA has projected a price target of ₹5,107 on the stock, implying a potential upside of 26% from Wednesday's closing levels. CLSA's target is the highest on the street for Avenue Supermarts among the 26 analysts who track the stock.
CLSA expects D-Mart's stores to triple by the financial year 2034 from the current 341 as the chain expands its presence in new states and those it is already present in.
The brokerage cited the opportunity of an addressable market over $500 billion, but less than 5% of which is organised. It further mentioned that D-Mart has the lowest consumer prices due to its lowest operating costs.
CLSA also expects private labels to drive the next leg of gains for Avenue Supermarts' stock going forward.
Promoted by Radhakishan Damani and his family, DMart retails basic home and personal products across markets, which include Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan.
Out of the 26 analysts that track the stock, 11 of them have a "buy" recommendation, while six of them say "hold." Nine analysts have a "sell" rating on the stock.
Avenue Supermarts shares were trading 2.7% higher at 4,166.2 apiece at 1.30 pm on March 21. The stock has gained 25.06% in the past year.
(Edited by : Akanksha Upadhyay)
First Published: Mar 21, 2024 7:55 AM IST
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