Avenue Supermarts shares hit a five-month high - What to watch hereon
Currently, Avenue Supermarts is the only stock with a market capitalisation in excess of Rs 2 lakh crore which is not included in the Futures and Options space.
Shares of Avenue Supermarts Ltd. rose to their highest level in five months after rising as much as 5 percent on Friday.
The company, which runs the DMart hypermarket chain of retail stores, has seen shares surge 11 percent this week and around 16 percent over the last month. The stock has risen 22 percent from its 52-week low. Shares have gained in seven out of the last 10 trading sessions.
Despite the surge, the stock is still 32 percent away from its all-time high. At current prices, the stock is trading at 36 times EV/EBITDA, which is well below its five-year average of 60 times.
Brokerage Motilal Oswal this month upgraded the stock to 'Buy', with a target price of Rs 4,200 per share. The price target values the stock at 50 times EV/EBITDA.
The brokerage believes that the stock has a long runway for growth as the modern retail space is still in its infancy in India.
“Weak SSSG (same store sales growth) has weighed on DMart’s stock price performance in the recent past," the brokerage said.
In key triggers ahead for the stock, primary includes a recovery in Same Store Sales Growth. Other triggers include improvement in product mix as inflation eases, scaling up of the e-commerce business and store-in-store foray of DMart Pharma.
Currently, Avenue Supermarts is the only stock with a market capitalisation in excess of Rs 2 lakh crore which is not included in the Futures and Options space. As on date, Avenue Supermarts is the 21st largest company in terms of market capitaliastion at Rs 2.6 lakh crore.
Shares of Avenue Supermarts are currently trading 3.2 percent higher at Rs 4,042.
First Published: Jun 16, 2023 2:53 PM IST
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