Avenue Supermarts releases Q1 business update; should you buy, sell, or wait?

Shares of Avenue Supermarts, which owns and operates the retail chain D-Mart, on Wednesday (July 3) inched higher. The diversified retail company released its Q1 business update on Tuesday after market hours. 

At around 9:54 a.m. shares of Avenue Supermarts were flat with positive bias at Rs 4780.5 apiece.

In the regulatory filing, Avenue Supermarts said its standalone revenue from operations for the quarter ended June 30, 2024 stood at Rs 13,711.87 crore.

Further, its total number of stores as of June 30, 2024, stood at 371, including one store in Rajkot, Gujarat which is temporarily closed to customers. 

What should investors do? 

Morgan Stanley maintained an 'overweight' rating on the stock and gave a target of Rs 5,123 apiece. As per the brokerage, Q1 growth is below expectations, but operational metrics continue to improve. 

Similarly, Macquarie iterated an 'outperform' rating on the stock with a target of Rs 5,150.

Meanwhile, Citi maintained 'sell' on Avenue Supermarts as it sees no sign of growth acceleration and will keep an eye on the margin trajectory. Citi has given a target of Rs 3,400. The report said that revenue per sq ft continues to be impacted due to adverse product mix and new store additions in smaller towns. Citi suggests remaining cautious given risks around store additions, earnings, and the P/E multiple.

However, it believes the Q1 of Avenue Supermarts is seasonally the strongest quarter in terms of margin.

Avenue Supermarts share price: Past performance 

In a year, shares of Avenue Supermarts have given returns of over 23 per cent against Nifty50's rise of over 24 per cent.

In five years, shares of Avenue Supermarts have given over 252 per cent against Nifty50's rise of 104 per cent.

Catch all the updates of the July 3 session on Dalal Street here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.

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