The split stock took center stage after Goldman Sachs upgraded its ‘sell’ rating
Shares of Avenue Supermarts, the parent of hypermarket chain- DMart took center stage in the session on Wednesday (December 11) after multinational firm Goldman Sachs maintained its previous ‘sell’ rating on the counter and cut its price target to Rs 3,425 from previously Rs 4,050 per share.
The set target implies a potential downside of more than 10 percent from the previous close of Rs 3,816.3 per share on the BSE.
The brokerage pointed out that the company’s competitive moat is under increasing pressure and given that foreign brokerages have lowered their FY25/26/27 earnings estimates by 4.2/6.2/6.1 per cent, respectively.
Also, Goldman Sachs noted that the discount offered by the company on grocery production has increased significantly from about 15 percent compared to MRP in July this year to about 25 percent in December. In addition, the company does not enjoy any competitive advantage in the fresh food sectors in the urban region.
The brokerage added that a large portion of the country’s grocery market cannot be addressed by D-Mart as it accounts for just 1/5th of the country’s $500 billion market.
Meanwhile, another brokerage Bernstein has maintained its outperform rating on the stock with a target maintained at Rs 5,800, implying a healthy potential upside of around 52 percent.
