Avenue Supermarts, the retail giant behind the DMart chain owned by veteran investor Radhakishan Damani, faced a significant sell-off on Friday. Shares of the company plummeted over 4% on the BSE, sliding to ₹3,983.05 as investors reacted to a business performance update that failed to meet market expectations for the first quarter of the 2026-27 financial year. While the company reported year-on-year revenue growth, analysts remain skeptical about its operational momentum, leading to a cautious outlook from several leading brokerage houses.Q1 Performance: Revenue Growth Fails to Spark OptimismAvenue Supermarts reported a revenue of ₹18,343.5 crore for the quarter ending June 30, 2026, marking a 15.1% increase compared to the ₹15,932.1 crore reported in the same period last year. During the quarter, the retailer added three new stores, bringing its total footprint to 503 outlets—an 18.6% growth in its store network year-on-year. Despite these expansions, the market response has been lukewarm, as investors remain concerned about the pace of sales growth. Additionally, the company has scheduled a board meeting on July 11 to explore raising funds through the issuance of debt securities, a move that will be closely monitored by shareholders.Brokerage Houses Sound the AlarmThe stock’s decline is being driven by bearish stances from major global brokerages. Goldman Sachs has maintained a 'sell' rating on the stock with a price target of ₹4,000, citing sluggish revenue growth despite a favorable inflation environment for FMCG products. The sentiment is even bleaker at Macquarie, which has maintained an 'underperform' rating and set a target price of ₹3,100, labeling the June quarter sales performance as "disappointing." According to Macquarie, both the store addition rate and overall revenue growth have underperformed compared to street estimates.A Divided Street: Analyzing Investor SentimentDespite the recent volatility, professional analysts remain divided on the long-term outlook for Avenue Supermarts. According to Bloomberg data reported by CNBC-TV18, of the 31 analysts tracking the stock, 10 have assigned a 'buy' rating, while 12 suggest a 'hold'. However, 9 analysts remain bearish with a 'sell' rating. On the optimistic side, Morgan Stanley has maintained an 'overweight' rating on the shares, keeping a bullish price target of ₹5,083. This divergence in analyst opinion reflects the broader market uncertainty surrounding DMart’s ability to sustain its premium valuation amid increasing competition and shifting consumer spending patterns.
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