Morgan Stanley has maintained its equal-weight rating on Avenue Supermarts with a target price of ₹4,552 per share, after the company’s Q2FY26 results missed expectations on profitability metrics. The retailer reported consolidated revenue growth of 15.5% year-on-year to ₹16,676 crore, while EBITDA grew 11% to ₹1,213.6 crore and PAT rose 2.3% to ₹684.9 crore.
Morgan Stanley said EBITDA and PAT were 7% and 14% below its estimates, respectively. LFL growth moderated to 6.8%, compared with 7.1% in Q1FY26 and 5.5% in Q2FY25 — marking a ten-quarter low, excluding the base effect quarter of Q2FY25.
The brokerage noted that D-Mart Ready, the company’s online arm, reduced its city presence to 19 from 25 in FY25, reflecting a strategic pullback to focus on profitable geographies. While overall expansion continues, Morgan Stanley believes slower growth in LFL and elevated operating costs will constrain near-term margin recovery.
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