Avenue Supermarts Ltd was trading more than 2 percent higher on March 28 afternoon as brokerage CLSA hiked the target price to Rs 5,307 from Rs 5,107 on the company's expansion push. The brokerage retained its “buy” call on the D-Mart operator.
The new target price set by CLSA indicates an 18 percent upside from it’s the stock’s current market price.
Avenue Supermarts opened 16 stores in the March quarter, ahead of the expectations of the brokerage. Store additions would be a key area of focus for investors, the brokerage said.
Apart from store additions, an inflation-driven increase in the prices of palm oil and crude oil will give Avenue Supermarts the flexibility to adjust its pricing strategy in the FY25 to mitigate the impact of higher costs on its business operations, the brokerage said.
Also Read | Avenue Supermarts up 11% in 3 sessions after CLSA initiates coverage with a 'buy' call
The comments comes after CLSA on March 21 initiated coverage on Avenue Supermarts with a "buy" call, citing growth opportunities in untapped markets.
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Avenue Supermarts has gained in seven of eight sessions.
At 3.10 pm, the stock was trading at Rs 4,521.80 on NSE, up 2.3 percent from the previous close. In the past six months, the stock has gained 22 percent and in the year, 35 percent.
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