Avenue Supermarts shares gain as CLSA assigns 'outperform' call

Shares of Avenue Supermarts Ltd., the parent company of the hypermarket chain DMart, rose 1.5% on Tuesday. This follows the reiteration by global brokerage firm CLSA of its 'High Conviction Outperform' rating, setting a target price ofRs 6,406. This valuation suggests a nearly 36% potential upside from the current trading levels, highlighting Avenue Supermarts' strategic initiatives and market strengths.

The brokerage firm emphasised DMart's advantages in customer engagement, competitive pricing, and robust product assortment, which contribute to its favourable market position. Additionally, the company's focus on maintaining consistently lower prices has been pivotal in attracting a broad customer base, thereby enhancing its competitive edge.

On Tuesday, Avenue Supermarts' shares rose 1.5% intra day to Rs 4796.75, marking a 34% gain in 2025. Despite the significant increase, CLSA notes that the company's valuation does not fully account for its rapid store expansion, push into private labels, and enhanced profitability. These factors are viewed as a strengthening of the company's market moat and long-term growth prospects, potentially driving further investor interest and confidence in its stock. The ongoing expansion and strategic initiatives are expected to bolster the company's market position, ensuring continued growth and resilience in a competitive retail environment.

The report from CLSA underscores that Avenue Supermarts' continued momentum is attributable to its strategic focus on building customer loyalty and expanding its market reach. This sets the company apart from competitors in the retail sector. The brokerage's optimistic outlook is bolstered by these factors, which are expected to sustain the company's growth trajectory.

CLSA's analysis aligns with the ongoing market trends, suggesting that Avenue Supermarts is well-positioned to capture increasing market share and deliver value to its shareholders in the foreseeable future. With a strong foundation and strategic foresight, the company is poised to navigate challenges and seize emerging opportunities effectively.