ICICI Direct has given Buy recommendation for Avenue Supermarts with a target price of Rs. 4530 in its research report issued on May 16, 2022
ICICI Direct’s research report on Avenue Supermarts
Avenue Supermarts (ASL) operates the supermarket chain under ‘D-Mart’ brand with a core focus on value retailing. D-Mart, through its proven business model, has been able to maintain consistent profitability and remains an exceptional performer in its peer group. D-Mart has progressively enhanced its return ratios (RoIC: 20%+) despite being capital intensive (follows ownership model) • Robust store operating metrics (break even in 18-24 months of its operations and one of the industry’s best revenue/sq ft: Rs 30000+)
Outlook
We upgrade the stock from HOLD to BUY. We value ASL at Rs 4530 i.e. 5.5x FY24E EV/sales.