Prabhudas Lilladher has given a hold recommendation on Avenue Supermarts (DMart) with a target price of Rs 1,338.
Shares of Avenue Supermarts traded at Rs 1,434 around 12:30 pm on 15 July, 2019. The brokerage has set a one-year horizon for the stock to hit the target price.
DMart has sustained strong sales momentum led by Everyday low price model, strong value proposition and clusters based strategy.
DMart has added 8 stores in Q120, however large part of store openings are a spillover of FY19.
"Though Q120 gross margins were higher, we believe it will normalise in the coming quarters," said the brokerage.
It continues to maintain its growth strategy of gradual acceleration in store openings (added 21 stores in FY17, 24 in FY18 and 21 in FY19) and strong throughput in stores.
The brokerage believes benefits of higher store openings in Q1 boosted sales while 40bps margin expansion was led by operating leverage.
"We estimatRead More – Source