Nuvama has maintained its ‘Hold’ rating on Avenue Supermart (DMart), while reducing its target price to ₹5,040 from ₹5,183. The revised target price represents a potential 10% upside from the current market price of ₹4,570. The downgrade in the target price comes in the wake of weaker-than-expected Q2 results, which dragged the H1FY25 like-for-like (LFL) growth.
DMart’s Q2 performance showed softer sales growth, with only six new stores opened during the first half of FY25. The higher operating expenses (opex) also weighed on the company’s EBITDA flow-through, further impacting profitability.
Nuvama highlighted the growing competition from online grocery platforms, which has added to the challenges facing DMart. The brokerage has factored in this competitive pressure and the resulting weakness into its revised outlook for the company.
Despite these challenges, DMart continues to work on mitigating the impact of rising competition, but investors are advised to approach cautiously as the stock navigates a period of slower growth and higher costs.
Disclaimer: The information provided is for informational purposes only and should not be construed as investment advice. Please consult your financial advisor before making any investment decisions.
