Shares of DMart operator Avenue Supermarkets were on the rise after a global brokerage said the stock was likely to gain from its rapid expansion.

What Happened: CLSA initiated coverage on Avenue Supermarts, the parent company of Radhakishan Damani’s hypermarket chain D-Mart, with a “buy” recommendation.

CLSA’s analysis projects a price target of ₹5,107 for Avenue Supermarts, indicating a potential upside of 26% from the closing levels observed on Wednesday. Notably, CLSA’s target stands as the highest among all analysts covering the stock.

CLSA’s bullish outlook is supported by expectations of D-Mart’s store count tripling by financial year 2034, reaching 341 stores. This expansion is anticipated to span both new states and existing territories where the chain already operates.

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The brokerage firm highlighted a substantial market opportunity exceeding $500 billion (41.56 lakh crore), with only a fraction organised. Additionally, CLSA emphasised D-Mart’s competitive advantage in offering the lowest consumer prices, attributed to its efficient operating model.

Furthermore, CLSA foresees significant growth potential driven by D-Mart’s private labels in the future.

DMart, backed by Radhakishan Damani and his family, caters to basic home and personal products across various states in India. Presently, the company operates in Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan.

Price Action: Avenue Supermarkets’ share price grew 2.9% to ₹4,173.80 in morning trade on Thursday.

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