Stock ALERT! Brokerages sceptical about Avenue Supermarts shares despite rise in Q1 revenue – check target price here

As the company reports over a 31 per cent rise in revenue, the brokerages have posted a mixed stance for the shares of Avenue Supermarts, which is a parent company of retail chain D-Mart.

The company on Friday reported standalone revenue from operations to Rs 5,031.75 crore in the June-ended quarter of the financial year 2021-2022, versus Rs 3,833.23 crore in the same period a year ago. 

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Morgan Stanley maintained an Overweight rating on Avenue Supermarts, while reduced the target price to Rs 3218 per share. The stock is currently trading over one per cent higher to Rs 3359 per share on Monday at around 12:15 pm.

DMart was one of the best reopening plays in Morgan Stanley’s coverage last year, it said the company is now also better positioned in the online delivery platform.

The company in its exchange filing said that its board will meet on Saturday, 10 July 2021, to consider earnings for the quarter ended 30 June 2021. 

Similarly, Macquarie upgrading FY23/24 EPS estimates for Avenue Supermarts by four and six per cent factoring in sales per sq ft moving back to FY19 levels in FY23. Maintaining an Outperform stance, the brokerage sets a target of Rs 3700 per share.

The brokerage expects, the inflation should increase the attractiveness of value retailers like DMart.

D-Mart makes most of its money from selling food, staples, and beverages which makes up more than half of its total sales. Its total number of stores as of June 30, 2021, stood at 238.

The stock on Monday opened higher at Rs 3384 per share and touched a day’s high at Rs 3394.75 per share, the stock since open has been trading above Rs 3350 per share levels since open today. The stock in the last one month has shown volatility however jumped almost seven per cent.