Anil Singhvi recommends SIP in this Radhakishan Damani-owned company: Check rationale and target price

After the Q3 business update, shares of DMart owner Avenue Supermarts traded strong with gains of over 14 per cent or Rs 526 at Rs 4,143.75 per share on the BSE. The stock earlier in the day hit 10 per cent upper circuit and then zoomed further to mark the day's high price of Rs 4,165.

On Thursday, the diversified retail player DMart released the business update for the quarter ended December 2024. For the third quarter, the company's standalone revenue from operations stood at Rs 15,565.23 crores. The same in the December quarter of the previous year was Rs 13,247.33. Also, the company's total store count as of December quarter was reported to be 387.

So, can you still buy Avenue Supermart shares after strong gains in Friday's session? Here's what Zee Business Managing Editor Anil Singhvi makes of the stock

Anil Singhvi has suggested a 'buy' on the scrip with the target pegged at Rs 4,200, Rs 4,500 and Rs 5,000- implying steep potential gains of over 38 per cent from the last close.

The investment horizon for the suggested scrip is one to three years.

Rationale for investment in DMart

Anil Singhvi believes that Damani has a strong execution track record. Further, he expects good growth from price-sensitive markets like UP and Bihar. Further, in respect of the threat from quick commerce (QC) players, market guru added that currently DMart faces only little competition from the likes of Blinkit and Instamart.

Moreover, DMart Ready-the company's online grocery shopping service from the supermarket chain DMart is also doing better now. 

The expert believes that DMart's profit will always be on the higher side in comparison to other QC competitors.

Considering all this, Singhvi has suggested to do a Systematic Investment or SIP in DMart on every 10 per cent fall.

He added that 17-18 per cent growth at the diversified retail player would be considered strong at the current valuation. Also, an opportunity to enter in the scrip may be available once the next quarterly results are out.