Shares of Avenue Supermarts Ltd have gained 11 percent after CLSA on March 21 initiated coverage on the company with a "buy" call, seeing growth opportunities in untapped markets.
On March 26, the stock closed 3.6 percent higher at Rs 4,450, the sixth straight day of gains. The stock has ended each of the past six weeks higher.
CLSA said an addressable market exceeding Rs 50,000 crore, with less than 5 percent organised.
With a target price of Rs 5,107, representing a 26 percent upside from the closing price of Rs 4,050 on March 20, CLSA said private labels could drive the next phase of share gains.
D-Mart's competitive consumer prices stem from its efficient operating model. CLSA projects a threefold increase in D-Mart stores by FY34, as the company looks to expand its footprint across existing and new states.
Also read | Avenue Supermarts rises on store additions; Morgan Stanley remains bullish
Over the last six months, Avenue Supermarts has gained nearly 22 percent and over 34 percent in the past year.
Founded by Radhakishan Damani in 2002, Avenue Supermarts operates a retail empire under the D-Mart brand.
In the third quarter of fiscal year 2023-24, the D-Mart operator reported a consolidated net profit of Rs 690.41 crore, marking a 17.09 percent increase from Rs 589.64 crore in the corresponding period last year. Additionally, consolidated revenue from operations climbed by 17.31 percent year-on-year to Rs 13,572.47 crore, compared to Rs 11,569.05 crore in the December 2022 quarter.
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