Prabhudas Lilladher Positive On This Retail Stock, Suggest Buy For Potential Upside

Prabhudas Lilladher in its recent report on Retail Sector, came up with a Buy rating on Avenue Supermarts Ltd. (D'mart). The brokerage has assigned a target price of Rs 4,447 apiece on the stock of D'Mart, claiming a potential upside of up to 23% from its current level.

Avenue Supermarts is a retail sector company that operates store chains under the D'Mart brand name. The company is primarily engaged in the business of organized retail. It is a large-cap company with a market capitalisation of Rs. 2,35,456 crore.

Bigbasket reduces price gap with D'Mart Ready

Prabhudas Lilladher said, "We analyzed price trend of 125 products across D'Mart Ready, Jiomart, & Bigbasket in key consumer categories of Loose grocery items, dairy, packaged food, beverages, personal care and home care. We observed that out of 125 products that we compared D'Mart Ready / Jiomart / Bigbasket increased prices of 30%/32%/24% products in May'23 vs Feb'23."

It added, "Bigbasket has lowered the price gap with D'Mart Ready & Jiomart across most categories. We expect increase in competitive intensity in online retail led by 1) significantly lower price gaps of big basket with others 2) rising consumer activations and advertising by D'Mart Ready 3) increase in delivery charges/ higher cart value for free delivery by Bigbasket and 3) growing salience of instant delivery platforms (Blinkit, BB Now and Swiggy Instamart) with young consumers. Renewed aggression of D'Mart will enable it to achieve sales of Rs54bn with EBIDTA breakeven by FY25 and PAT breakeven by FY27. Retain Buy on D'Mart with DCF based target price of Rs4447".

Stock Outlook

On Friday, the share price of Dmart closed 2.40% higher at Rs.3,632.10 apiece on NSE. It recorded the 52 week low on 16 March 2023 at Rs. 3,292 apiece and 52 week high on 02 September 2022 at Rs. 4,609 apiece, respectively.

It surged 2.85% in 1 week. However, it declined 5.18% in 1 year. It has given a 51.96% positive return and 127.93% in the past 5 years, respectively.

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.