This diversified retail stock in focus after Goldman Sachs continues its sell rating

Shares of Avenue Supermarts, the parent of hypermarket chain- DMart are in focus in Wednesday's session (December 11) after global brokerage Goldman Sachs has continued with its previous 'sell' stance on the counter and also slashed the target price to Rs 3,425 from the earlier Rs 4,050 per share.

The set target implies a potential downside of over 10 per cent from the previous close of Rs 3,816.3 per share on the BSE.

The brokerage pointed that the company's competitive moat is facing increasing pressure and considering it the foreign brokerage has slashed its earnings estimates for FY25/26/27 by 4.2 per cent/6.2 per cent /6.1 per cent, respectively.

Also, Goldman Sachs noted that the company's discount offerings on grocery produce has increased sharply from around 15 per cent over the MRP in July this year to around 25 per cent in December. Furthermore, the company does not enjoys any competitive advantage in fresh food categories in the urban region.

The brokerage added that large section of the country's grocery market is not addressable by D-Mart as it caters to just 1/5th of the nation's $500 billion market.

Meanwhile, another brokerage Bernstein has continued with its outperform rating on the stock with the target kept at Rs 5,800, implying healthy potential upside of nearly 52 per cent.