Shares of Avenue Supermarts Limited, a company that runs retail store chain D-Mart, have been among the hottest stocks in the market for the past few years. The stock of this company of veteran investor Radhakrishna Damani climbed 9.73 percent to a new peak of Rs 4,837 on Monday. The company’s market capitalization has crossed Rs 3 lakh crore as soon as its shares hit an all-time high. Only 16 listed companies in the country have a market capitalization above Rs 3 lakh crore. Rakesh Jhunjhunwala, who is called the Warren Buffett of India, also considers Damani as his mentor.
Revenue up 47 percent in one year
In the last one year, the revenue of Avenue Supermarts Limited has increased by 46 percent. Last year (2020), the company’s revenue was Rs 5,218.15 crore in the second quarter but it increased to Rs 7649.64 crore in the second quarter of 2021. Brokerage firms are looking quite bullish about the company’s stock. Goldman Sachs says that after the end of the lockdown, the arrival of customers to the company’s stores has increased and this has increased its earnings significantly. The brokerage firm has increased its price target from Rs 4239 to Rs 4539. Meanwhile, the company has added eight more stores. Now the number of its stores is 246.
Stock Tips: Golden opportunity to invest in these two stocks, market experts gave this target price
Can the company’s stock still earn?
But the big question is whether this stock will go beyond this. Its valuation for FY 2022-23 is (106xFY23e PE). Many investors may feel that this is too much from its fundamentals. Is it at risk of de-rating? On this matter, HSBC Global Research says that we are currently in the middle of high growth compound construction of this stock. Therefore, investors should maintain a positive attitude about this stock. They can stay in this stock.
Investment Tips: Build the best portfolio in just 1 thousand rupees, you can make big capital by investing in these options
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)