March 2024 results are about to be reported in full swing, and, before the same, various Brokerages are coming up with stock price targets discounting for their financial results and many other associated factors.
Listed below is a stock of an FMCG company founded by Mr. Radhakishan Damani that one should consider adding to their portfolio after a well-known International Brokerage upgraded the target price of the company’s stock.
Avenue Supermarts Limited
With a market capitalization of Rs 2.87 lakh crores, the stocks of Avenue Supermarts Limited, popularly known as ‘D-mart’, started their trading session on Wednesday at Rs 4,431.25 and currently trade at Rs 4,435.25, gaining around 0.60 percent compared to the previous close of Rs 4,411.05 apiece.
CLSA, one of the renowned foreign equity brokerages in China focusing on alternative investments, asset management, corporate finance, etc, provided a second ‘upgrade’ on the stocks of Avenue Supermarts Limited within a span of just one week.
It provided a target price of Rs 5,514 from the price of Rs 5,307 provided past week, reaffirming its “buy” call, with a potential upside of approximately 25 percent.
The Brokerage believes that the increase in the pace of store additions, i.e., adding 21 new stores in the March 2024 quarter and taking up the total number of stores to 365, should aid the company in mitigating some of the concerns raised by its investors. Moreover, it would also enhance the company’s product mix and lead to improvements in the gross margin.
CLSA had initiated coverage of the company’s stock on 21st March 2024 providing a “buy” recommendation with a target price of Rs 5,107 per share, citing esteemed growth opportunities in untapped markets.
Post the same, the Brokerage again raised the target price to Rs 5,307 from the earlier quoted stock target, driven by the company’s aggressive expansion efforts. Since CLSA initiated coverage on Avenue Supermarts, the stock has surged by approximately 6 percent.
Having a glance at the financial performance, the company’s prime indicators of business, viz, its operating revenues as well as after-tax profits, showed a stellar performance with the former increasing from Rs 12,624 crores during Q2FY24 to Rs 13,572 crores during Q3FY24, and the latter, during the same period, rose from Rs 623 crores to Rs 690 crores.
Mr. Radhakishan Damani, one of the well-known ace investors based in India, is the founder and majority shareholder of Avenue Supermarts Limited. According to the latest shareholding data available, he holds around 43.74 crore equity shares of the FMCG company equivalent to a 67.24 percent stake.
Founded in 2002, Avenue Supermarts Limited is a company engaged in the business of organized retail and operates supermarkets under the brand name ‘D-Mart’. Carrying on its business operations principally within India, the company’s product categories include foods, FMCG, general merchandise, and apparel.
Written by Amit Madnani
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