Avenue Supermarts shares get price target cuts from analysts post Q3 results, CEO transition

Avenue Supermarts shares get price target cuts from analysts post Q3 results, CEO transition

Analysts who track shares of Avenue Supermarts Ltd., parent company of hypermarket chain D-Mart, have cut their price targets for the stock after its December quarter results and a surprise announcement with regards to its CEO transition.

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Avenue Supermarts reported a 17.7% revenue growth during the December quarter, as it shared during its business update, but margins narrowed further to 7.6% from 8.3% last year.

An increased intensity in discounting in the FMCG category, increased operating expenses on store expansion are some of the factors that contributed to lower margins.

Same store revenue growth for the quarter stood at 8.3%.

Additionally, the company’s CEO Neville Noronha will be stepping down as MD & CEO From February 1, 2026 and Anshul Asawa, currently the country head of Unilever-Thailand will be the CEO designate.

Brokerage firm Bernstein has maintained its “outperform” rating on the stock with a price target of ₹5,800, which is among the highest on the street for Avenue Supermarts.

The brokerage said that while same store sales may have recovered in the December quarter, it may be seasonal and further improvement over the next two quarters is likely to be limited.

The brokerage also expects weakness in the FMCG share to continue and groceries will continue to gain as DMart’s key strength.

JPMorgan remains “neutral” on Avenue Supermarts but has cut its price target to ₹4,150 from ₹4,700 earlier. It said that the like-for-like growth momentum improved with a reduced impact from elevated discounting in the FMCG category, particularly in metro towns.

The brokerage also called the CEO transition as an “important development.”

Morgan Stanley remains “underweight” on Avenue Supermarts and has also cut its price target on the hypermarket chain to ₹3,260 from ₹3,702 earlier.

The brokerage said that the management commentary in recent quarters has raised doubts among investors about its growth algorithm going forward.

Another brokerage who has cut its price target on Avenue Supermarts is Citi, who slashed its target to ₹3,350 from ₹3,500 earlier, while maintaining its “sell” recommendation on the stock.

Citi wrote that DMart continues to see increased intensity in discounting in the FMCG category and consequent impact is seen in the high turnover stores in metro towns.

Among the 30 analysts that have coverage on Avenue Supermarts, 11 of them have a “buy” rating, nine of them say “hold”, while the other 10 have a “sell” rating on the stock.

Shares of Avenue Supermarts had ended 3% lower on Friday at ₹3,702. The stock has corrected 33% from its recent peak of ₹5,484.

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