Radhakishan Damani's Avenue Supermarts Hits 52-Week High After Strong Q4 Business Update

Shares of Avenue Supermarts on Thursday, April 4, scaled a new 52-week high of Rs 4,710.15 on the BSE, gaining nearly 5.61 per cent.

At 11.30 am, the stock was trading at Rs 4,624.00, up 3.66 per cent from the previous close. The share has surged over 20 percent in the past month.

The stock’s gains came after Avenue Supermarts Ltd, which owns and operates the retail chain DMart, released its Q4 business update after market hours on Wednesday.

In its Q4 business update, Avenue Supermarts posted a rise in standalone revenue of 20 per cent to Rs 12,393.46 crore (YOY). As of March 31, the total number of stores stood at 365.

“The standalone revenue from operations for QE March 31, 2024, given above, is subject to audit by the Statutory Auditors of the Company,” the company’s filing said.

Following the announcment, Morgan Stanley maintained its “overweight” call and assigned a price target of Rs 4,695, which has already been breached.

The revenue growth is higher than the 18 percent witnessed in the nine months of FY24, largely led by same-store sales growth (SSSG) of 11 percent, the brokerage said. The SSSG recorded by the company is the highest in the last five quarters.

On April 2, CLSA upgraded its target price for the stock to Rs 5,514 from Rs 5,307, reaffirming its “buy” call, as the supermarket chain’s quarterly store additions reached an all-time high.

The revised target price, second such move in a week, represents a 23 percent increase over the stock’s closing price Rs 4,460 on April 3. The brokerage initiated coverage of the company on March 21 with a “buy” recommendation, highlighting promising growth prospects in untapped markets.

Macquarie has maintained an outperform call on the stock with a target price of Rs 4,500. According to Macquarie, the updates are broadly in line with sales growth, while store additions are ahead of estimates.

Steady improvement in sales growth trajectory, the brokerage said in its note. According to Macquarie, this was a healthy contrast from the last few quarters, which saw weak pre-quarterly commentary.