Top Conviction Ideas : Buy Avenue Supermarts Ltd for Target Rs. 4810 - Axis Securities Ltd
* Consistent Revenue Growth: D-Mart has consistently delivered 17-20% CAGR revenue growth over the past several quarters, driven by 14-15% expansion in its network and retail space. The recent investment in D-Mart Ready, to support operations, working capital, and expansion, is a step in the right direction. This strategic move will strengthen the company’s position in the competitive online grocery market and is expected to yield long-term benefits. In Q1FY26, D-Mart reported ~18% YoY revenue growth, driven by increased footfalls.
* Challenges and Strategic Interventions: D-Mart has been facing challenges from muted demand in the value segment, longer gestation for larger stores, and rising competition. However, strategic steps such as leadership changes to revive GM&A, calibrated expansion of D-Mart Ready, and a prudent ~15% store addition plan are expected to drive recovery. Supported by stable macros and a strong festive outlook in H2FY26, profitability in high-margin categories should improve
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