India's DMart owner climbs on rare rating upgrade

Avenue Supermarts

09/06/2023 07:13

** Shares of Avenue Supermarts  AVEU.NS , which operates the
DMart retail chain, up 2% at 3,621 rupees
    ** Motilal Oswal raises to "buy" from "neutral" in stock's
first rating upgrade since Oct 22, per Refinitiv data
    ** In that period, stock had at least 4 rating cuts and has
fallen nearly 16% due to a string of disappointing results 
    ** However, Motilal Oswal says DMart's competitive moat is
intact despite recent aggression of online/quick commerce firms
    ** Expects DMart's same-store sales growth to recover in
FY24 on tailwinds from robust store additions in past 3 years,
consistent cost efficiency
    ** Estimates a revenue/PAT CAGR of 27%/29% over FY23-25 vs
about 21%/8% in latest Q4
    ** Broker also raises PT to 4,200 rupees from 3,895 rupees
    ** Avg rating of 25 analysts covering AVUE is equivalent of
"hold", median PT is 3,860 rupees - Refinitiv data

 (Reporting by Ashish Chandra in Bengaluru)
 ((ashish.chandra@thomsonreuters.com (+91 7982114624))