Buy This Retail Sector Large Cap Stock For Strong 40% Upside, Says Prabhudas Lilladher

Prabhudas Lilladher has assigned a "Buy" on the stock of Avenue Supermarts Ltd. with a target price of Rs 4,699 apiece. The stock is likely to give up to 40% strong return. This is a large-cap Retail sector stock that operates D-Mart, a supermarket brand. It has a market capitalisation of Rs2,18,105 crore.

Avenue Supermarts - Stock Performance, Returns, 52 Week Low/High

The stock of Avenue Supermarts is currently trading at Rs 3,357.75 apiece, down 0.12% as compared to its previous close of Rs 3,361.40 apiece. The stock traded 52 week low on 16 May 2022 at Rs 3,186 apiece and 52 week high on 2 September 2022 at Rs 4,609 apiece, respectively.

The stock has fallen 0.34% in the past 1 week. In the past 1 month, it has fallen 3.11%, and in 3 months, it has fallen 13.03%. Over the past 1 year, the stock declined 17.62%. In 3 years it has given 85.17% positive return. In 5 years it has given 163.1% positive return.

"Ready" for a long drive, Buy for a target price of Rs 4,699 apiece

According to Prabhudas Lilladher, Avenue Supermart (DMART IN) has corrected by 27% from 52-week high due to concerns on 1) slow post covid recovery in sales parameters 2) deterioration in sales mix 3) effectiveness of D'Mart to face onslaught of online retail on brick & mortar modern trade and 4) sustainability of growth & profitability metrics. "We believe that the deterioration in sales parameters is a result of 3x increase in stores within emerging clusters and 100% increase in number of stores with

It added, "We remain positive on D'Mart Ready as it has increased city presence to 22, reduced delivery time to 1 day with reduction in delivery charges (Flat Rs49 as against 3% earlier). We believe attractive prices and far better consumer proposition than Big Basket (largest online retailer) will enable D'Mart Ready to turn EBIDTA positive by FY25 and PAT positive by FY27."

It further added, "We believe D'Mart has a huge growth runway ahead given low probability of heightened competition in modern trade, 1500+ store potential in existing clusters (current stores 306) and fast scale up in D'Mart Ready. We estimate 25% PAT CAGR over FY23-27 and retain 'BUY' with DCF based target price of Rs4699 (Rs4675 earlier)."

Disclaimer - The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.