Alliance Bernstein Holding L.P., a leading global asset management firm, offers investment management and research services to a broad client base, including institutional investors, high-net-worth individuals, and retail clients.
Bernstein recently initiated coverage on India’s retail and restaurant sectors, suggesting that demand can be unlocked beyond the top 10 percent of the wealth pyramid and the largest 40 cities.
According to Bernstein, the spending power of the Indian middle class is limited not by a lack of demand but by the need for more affordable and accessible products—highlighting a supply-side issue rather than a demand-side one. This presents a significant growth opportunity for companies to tap into immediately, as per the report.
Listed below are two stocks with an upside potential of 25%
Avenue Supermarts Ltd
The shares of this leading player in the organized retail sector opened at ₹5,028.90 in Friday’s trade. The stock has received a target price from the international brokerage, indicating a potential upside of 26%.
Avenue Supermarts, known as DMart, primarily operates in the organized retail business and runs supermarkets under the D-Mart brand name. DMart has 365 stores spread across 23 cities in states like Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab, and Rajasthan.
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Avenue Supermarts Ltd generates 56.96% of its revenue from food products, 20.68% from FMCG items, and 22.37% from general merchandise and apparel. In FY24, the company expanded its store count from 324 in FY23 to 365.
Between FY23 and FY24, the company’s revenue increased significantly by 18.5%, rising from ₹42,480 crores to ₹50,789 crores. In the same period, net profit grew by 6.6%, from ₹2,378 crores to ₹2,536 crores.
Additionally, Avenue Supermarts Ltd’s shares have risen by 28% over the past six months and 35% over the past year.
International brokerage Bernstein has assigned an outperform rating on the shares of Avenue Supermarts Ltd for a target price of ₹6,300 per share, which suggests a 25% potential upside from the current price of ₹5,024.
According to the latest shareholding pattern as of June, the company promoter holds a 74.64% stake, Foreign Institutional Investors (FII) hold 9.22%, and Domestic Institutional Investors (DII) hold 7.95%.
Trent Ltd
Shares of the leading retail firm opened at ₹7,200.10 in Friday’s trade, with the brokerage setting a target price for a potential 13% upside.
Trent Limited is part of the Tata Group, which is engaged in the business of retailing apparel, footwear, accessories, toys, games, food, grocery, and non-food products through various retail formats and concepts.
As of 2024, Trent Ltd operates 232 Westside stores, 545 Zudio stores, and 66 Star Bazaar locations across India. The company also has a 49:51 joint venture with Inditex to run Massimo Dutti stores in India.
From FY23 to FY24, Trent Ltd’s revenue surged by 50%, growing from ₹8,242 crores to ₹12,375 crores. During the same period, net profit soared by 274%, increasing from ₹394 crores to ₹1,477 crores.
Trent shares have climbed 85% over the past six months and 250% over the past year.
Bernstein has given an outperform rating to Trent Ltd shares, for a target price of ₹8,100 per share, indicating a potential 13% increase from the current price of ₹7,202.50.
According to the latest shareholding pattern as of June, the company’s promoters hold a 37.01% stake, Foreign Institutional Investors (FIIs) hold 27.87%, and Domestic Institutional Investors (DIIs) hold 13.18%.
Further, Trent Ltd will be included in the Nifty 50 index as part of the semi-annual rebalancing process, effective September 30, 2024.
Written by Omkar Chitnis
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