Should you buy or sell Avenue Supermarts post Q4 earnings?

The stock fell 0.80% to the day's low of Rs 4,576 on the NSE.

Avenue Supermarts reported a consolidated net profit for the quarter ended March 2024 of Rs 563 crore as against Rs 460 crore in the corresponding quarter of the previous financial year. The company's jumped 20% YoY to Rs 12,727 crore.

Here's what brokerages recommended:

JP Morgan: Overweight | Target: Rs 5,400

JP Morgan has upgraded the stock to 'Overweight' from 'Underweight' and hiked the target price to Rs 5,400 from Rs 3,555 following its . In a note, JP Morgan said that the company's strong moats remain intact while robust revenue growth augurs well for the company.

It sees a gradual expansion in margin going ahead

The stock valuations are at a premium though remaining below historical average. In JP Morgan's view, the risk-reward is favorable now with business set well for acceleration. It will be ably supported by longevity of healthy growth.

Kotak Equities: Sell | Target: Rs 3,800

Kotak Equities has retained its estimate on the DMart operator maintaining a 'Sell' view for the price target of Rs 3,800 which was earlier Rs 3,650.

Dmart’s 4QFY24 reported an in-line revenue growth which was led by a retail area addition of 15% YoY and SSSG. The gross margin print of 14.5% was up 40 bps YoY, driven by an improved GM&A mix. EBITDA margin came in at 7.4%, 11 bps ahead of Kotak's estimates. Dmart managed to close FY2024 with 41 new stores, with 24 stores added in 4Q itself.

"We retain estimates, which assume 20% revenue and 22% EBITDA CAGR over FY2024-27. Roll-forward to June 2026E drives a new FV of Rs 3,800. Valuations at 64X FY2026E are rich," the Kotak note said.

Motilal Oswal: Buy | Target: Rs 5,310

Motilal broadly maintained its FY25/FY26 estimates, factoring in a CAGR of 23%/35% in revenue/PAT over FY24-26, supported by 11%/12% growth in
footprints/revenue productivity. Subsequently, it assigned a 47x EV/EBITDA multiple (75x PE) on an FY26E basis to arrive at a target price of Rs 5,310. It reiterated its BUY rating on the stock.

Prabhudas Lilladher: Buy | Target: Rs 5,031

DMart 4Q/FY24 results indicated stabilization after erratic performance in operating parameters. With 41 store additions in FY24, D’Mart seems slowly getting its act together to accelerate store openings in coming years.

Nuvama: Hold | Target: Rs 4,821

Nuvama has maintained a 'Hold' rating on the while raising the price target to Rs 4,821 from an earlier Rs 4089.

The company reported a miss in EBITDA/PAT of 3%/5.3% with standalone EBITDA up 20% YoY. Commentary on the general merchandise and apparel (GM&A) share increasing, which has resulted in a 30bp YoY improvement in gross margins, is a positive. DMart Ready performance (implied from subsidiaries) was steady, and it is now present in 23 cities.

A big positive this quarter was the addition of 24 stores taking the total for FY24 to 41 stores.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)