Morgan Stanley has downgraded Avenue Supermart (DMART) to Underweight, slashing its target price to ₹3,702, indicating a 19% downside from the current market price of ₹4,570. The downgrade follows DMART’s Q2 results, which missed expectations on both top-line performance and margins.
The brokerage is particularly concerned about management’s commentary regarding increased competition from online grocery platforms, which is impacting like-for-like (LFL) growth. This raises doubts about the company’s long-term top-line growth, previously pegged at around 20%, potentially leading to further de-rating of the stock.
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