Shares of Avenue Supermarts Ltd, the parent company of retail chain DMart, gained nearly 2% in early trade on Thursday, September 18, after global brokerage UBS reiterated its “buy” rating on the stock while raising the target price to ₹5,600 from ₹5,050. The revised target implies a potential upside of nearly 20% from Wednesday’s closing price of ₹4,717.
UBS, in its note, termed Avenue Supermarts a “major compounder” in India’s consumption story, highlighting four factors supporting its bullish outlook:
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Aggressive store expansion: DMart could accelerate its rollout, potentially opening 230–250 stores in the next three years, compared to around 130 in the last three years.
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Strengthening e-commerce: DMart Ready, the company’s online arm, continues to enhance its value proposition, complementing the offline growth trajectory.
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Resilient same-store growth: Same Store Sales Growth (SSSG) has remained in high single digits, countering concerns that quick commerce could eat into DMart’s market share.
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Low penetration advantage: Organised grocery retail in India is valued at nearly $60 billion, with still low penetration. UBS expects DMart to grow structurally at 18–22% annually over the long term.
Since its listing in March 2017, Avenue Supermarts shares have surged nearly 1,500% from its IPO price of ₹299, despite correcting from its 52-week high of ₹5,484.
