Shares of Avenue Supermarts Ltd, the operator of DMart retail stores, declined 4.65% to ₹3,964.50 on Friday despite posting a strong standalone revenue of ₹14,462.39 crore for Q4 FY25, marking a 16.7% year-on-year increase. The fall comes after global brokerage Morgan Stanley reiterated its ‘Underweight’ rating and set a target price of ₹3,260, signaling a potential downside from current levels.
Morgan Stanley flagged concerns around valuations and margin risks, noting that while the company’s revenue growth remains solid, the pace may be moderating. The five-year Q4 revenue CAGR stood at 18.5%, slightly above the 18.2% recorded in Q3 but still trailing the 20% average from earlier quarters.
The company added 28 new stores during the quarter — its highest-ever quarterly expansion — bringing the total store count to 415. Same-store sales growth was estimated at 8–9% for the quarter.
Despite robust fundamentals, the brokerage believes the stock’s high price-to-earnings ratio of over 95 limits the margin of safety, prompting cautious investor sentiment. As a result, Avenue Supermarts’ shares reacted negatively even amid continued operational strength.
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