Avenue Supermarts Shares Hit Upper Circuit After Q3 Update | Can DMart Beat Online Rivals?

Avenue Supermarts, the owner of the DMart retail chain, saw its shares hit the upper circuit following the release of its Q3 business update. Addressing the stock’s performance, Mayuresh Joshi, Head of Equity Research at William O Neil India, shared insights into the challenges and prospects for DMart. He noted that while the stock has seen a sharp correction, its business model, focused on owned stores and high revenue per square foot, remains a key advantage. However, the rise of online competitors and quick-commerce platforms like Instamart poses significant challenges. Joshi emphasized the need for DMart to adapt its strategy to address competition from aggregators and dark stores, suggesting that a revamped model could improve performance over time. Despite premium valuations, he advised monitoring the company's quarterly results and strategies before justifying a re-rating of the stock.