DMart share price: Retail chain company stock jumps 5% intraday on Q1 update – Morgan Stanley sees 28% upside – know reasons here

Amid a strong first-quarter update for the financial year 2022-23, shares of Avenue Supermarts under the brand of DMart have jumped 5 per cent to touch the day’s high level of Rs 3354.7 per share on the BSE intraday during Monday’s trading session.  

DMart on Saturday, reported a nearly twofold rise in its standalone revenue from operations to Rs 9,806.89 crore for the first quarter ended on June 30, 2022, the company said in a regulatory filing. 

This is also helped by a comparatively low base of the pandemic impacted the corresponding quarter, it said, adding that the total number of stores as of June 30, 2022, stood at 294. 

Global brokerage firm Morgan Stanley maintains an Overweight rating on Avenue Supermarts and said standalone Q1 revenue was up 95 per cent year-on-year, led by a 21 per cent increase in store count. It set a target price of Rs 4332 per share, which translates 28 per cent upside in the stock. 

Similarly, according to Motilal Oswal DMart’s soft store performance can be attributed to the high consumer traction on online platforms as its higher revenue contribution stores are largely based in metros and Tier I cities. The domestic brokerage gives a Neutral call and sees an upside of 3 per cent. 

The stock in the last six months has cracked over 26 per cent as compared to an over 11 per cent fall in the S&P BSE Sensex. The counter is available at a discount of nearly 40 per cent from its 52-week high at Rs 5899.9 per share as compared to the current level. 

Founded by ace investor Radhakishan Damani in 2002, Avenue Supermarts Limited is a retail company that operates a chain of hypermarkets in India.  

In the April-June quarter of FY 2020-21, Avenue Supermarts' standalone revenue was at Rs 3,833.23 crore. It was Rs 5,780.53 crore in the pre-pandemic April-June quarter of FY 2019-20.