Fundamentally strong stock to buy now for an upside of 47%; Do you own it?

Synopsis:- Brokerage remains bullish with a ₹6,185 target, implying ~47% upside from ₹4,190. Store count reached 481 with 66 additions, exceeding expectations. Q4 saw 39 new stores. Operating profit rose to ₹1,463 crore with stable 8% margins, reflecting strong expansion and execution momentum.

India’s retail sector entered FY26 on a strong growth trajectory, with the overall market estimated at around Rs 90–95 lakh crore in 2025 and projected to expand at a double‑digit pace in 2026. Discretionary spending and Tier II–III cities are driving store additions and digital adoption, while organised and omnichannel retail continues to gain share in a largely fragmented landscape.

With a market capitalisation of Rs 2,72,657.16 crore, the shares of Avenue Supermarts Ltd were trading at Rs 4,190.00 per share, increasing around 6 percent as compared to the previous closing price of Rs 3,961.25 per share.

Brokerage Recommendation

CLSA has taken a bullish view on the retail stock, assigning a ‘Buy’ rating with a target price of Rs 6,185. This implies a strong upside of around 47% from the current level of Rs 4,190.00, reflecting confidence in its expansion strategy, earnings visibility, and long-term growth potential.

As per the brokerage, DMart has accelerated store expansion significantly, opening 9 stores in just three days, taking the total count to 481. Annual additions have reached 66 stores, exceeding initial expectations of 60, reflecting strong execution and aggressive growth strategy despite nearing financial year-end timelines.

The company has also maintained strong momentum in the fourth quarter, adding 39 stores so far compared to 28 in the same period last year. This sharp increase highlights improved expansion pace and operational efficiency, positioning the company well to capture rising consumption demand across urban and semi-urban markets.

Financial performance remains solid, with net profit rising 17% to Rs 856 crore and EBITDA growing 20.2% to Rs 1,463 crore. Margins improved to 8.1% from 7.7%. However, analyst sentiment remains mixed, with 10 buy, 11 hold, and 8 sell ratings, indicating balanced market expectations.

Financial Highlights

The company reported a steady performance in Q3FY26, with revenue rising 13% from Rs 15,973 crore to Rs 18,101 crore, indicating healthy demand and store expansion impact. Net profit grew 18% to Rs 856 crore, outpacing revenue growth, suggesting improved operational efficiency and better cost management during the quarter, supporting overall profitability momentum.

Over the past year, operating performance showed healthy growth. Operating profit increased from Rs 1,217 crore in Dec 2024 to Rs 1,463 crore in Dec 2025, reflecting strong business momentum. Meanwhile, operating profit margin (OPM) remained stable around 8%, indicating consistent cost control despite rising expenses, supporting steady profitability improvement during the period.

Avenue Supermarts is a leading retail company in India, operating the DMart chain of supermarkets. Known for its value-driven pricing and efficient operations, it focuses on offering quality products at low costs, catering to middle-class consumers while steadily expanding its store network across cities.

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