Morgan Stanley has reiterated its “Underweight” rating on Avenue Supermarts stock (DMart), with a target price of ₹3,702 per share. This reflects a modest upside of 2.4% from the current market price (CMP) of ₹3,615.30.
Key highlights from Morgan Stanley’s analysis:
- Revenue above estimates: Avenue Supermarts reported standalone revenue exceeding expectations, driven by positive growth dynamics.
- Drivers of topline growth:
- A 12% increase in average store count contributed significantly to the topline.
- Same-store sales growth also supported revenue expansion.
- Sequential growth trends showed improvement compared to previous periods.
- Lagging historical growth rates: Despite these positives, the company remains well below its historical topline growth algorithm of 20%, raising concerns about long-term growth sustainability.
Morgan Stanley maintains a cautious stance, acknowledging the sequential improvement in growth but emphasizing the company’s struggle to match historical performance benchmarks.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Readers should perform their own research or consult a financial advisor before making investment decisions.
