Avenue Supermarts shares slip over 4% post-Q3 business update; here is what brokerages say

DMart Q3 update: Avenue Supermarts shares slipped over 4 per cent on Wednesday (January 3) after brokerages gave mixed reactions to the DMart chain operator's Q3 business update, which was released on Tuesday. The company, for the quarter gone by, reported a 17.18 per cent increase in its standalone revenue from operations to Rs 13,247.33 crore. Avenue Supermarts shares ended at Rs 3,940, down by Rs 163.35 or 3.98 per cent on NSE. 

The company had registered revenue from operations of Rs 11,304.58 crore in the October-December quarter a year ago, according to a quarterly update by Avenue Supermarts dated January 2. The total number of stores as of December 31, 2023, stood at 341

Post the business update, Morgan Stanley has maintained an overweight rating on Avenue Supermarts with a target price of Rs 4,471. Operational metrics have improved further, and the pace of store additions needs to pick up, the global brokerage said in its note.

HSBC has a ‘buy’ call on the DMart stock. The brokerage has reduced the target to Rs 4,600 from Rs 4,630. 3QFY24 sales growth declined sequentially to 17 per cent YoY; throughput improved but remained below pre-COVID-19 levels. Five stores were opened in 3Q (17 so far in FY24), taking the overall store count to 341—still a pedestrian pace, said the brokerage.

Macquarie has maintained an 'outperform' rating on the counter. The target has been cut to Rs 4,350 from Rs 4,450. However, Citi has maintained a sell call with a target of Rs 3,100.

What does DMart do?

DMart is a supermarket chain that offers customers a wide range of basic home and personal products, including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, and home appliances, among others. It is owned and operated by Avenue Supermarts Ltd. (ASL) and has its headquarters in Mumbai. It was founded by Radhakishan Damani.

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