DMart Shares: Buy, Hold, or Sell? Analyzing RK Damani’s Stock Performance
In recent news, Avenue Supermarts Ltd, famously known for its DMart brand and led by Radhakishan Damani, has posted disappointing results for the September quarter. As analysts weigh in on the stock’s future, investors are left wondering whether to buy, hold, or sell. Let’s break down the latest developments and insights.
Recent Performance Overview
The latest financial results revealed that DMart’s EBITDA fell short of market expectations, primarily due to lower productivity and rising retail costs. As a consequence, earnings projections for fiscal years 2025 and 2026 have been revised downwards. This news has triggered a mixed reaction from analysts, leading to varied recommendations on the stock’s potential.
Key Factors Impacting Performance
- Store Expansion Plans: MOFSL noted that DMart’s growth heavily relies on its ability to expand store locations. They anticipate significant store additions in the coming years, which could help boost revenue, despite a projected slowdown in same-store sales growth.
Analyst Recommendations
Given the current landscape, here’s a summary of key analyst positions on DMart shares:
- Increased Competition: Analysts highlight that DMart’s sales have been adversely affected by the growing competition from online grocery formats, particularly quick commerce services in metropolitan areas. This trend poses a significant challenge for brick-and-mortar retailers.
- Earnings Estimates Adjustment:Antique Stock Broking revised its EBITDA estimates downward by 6-10% for FY25-27, maintaining a HOLD recommendation with a target price of ₹5,026, slightly down from ₹5,098.Centrum Broking, on the other hand, has upgraded its rating to BUY following a price correction, setting a revised target price of ₹5,655.
Antique Stock Broking: HOLD recommendation with a revised target price of ₹5,026, emphasizing the importance of DMart’s ability to compete against online grocery players.
Centrum Broking: Upgraded to BUY with a target price of ₹5,655, citing recent price corrections as an opportunity for investors.
MOFSL: Retains a HOLD stance with a revised target price of ₹5,040, influenced by challenges in the first half of FY25.
Conclusion: What Should Investors Do?
With DMart shares currently trading about 10% below their long-term average, investors face a decision. For those already holding the stock, the recommendation leans towards holding, while recent price corrections present a potential buying opportunity for new investors.
As always, it’s crucial for investors to stay informed and consider their individual financial circumstances and risk tolerance. Consulting with a financial advisor is recommended before making any investment decisions.
Disclaimer
This blog is for informational purposes only and should not be construed as investment advice. Always seek guidance from a qualified financial advisor to tailor your investment strategy to your needs.
Reference from :- https://www.businesstoday.in/markets/stocks/story/dmart-shares-should-you-buy-hold-or-sell-this-rk-damani-stock-here-are-target-prices-449862-2024-10-14