RK Damani Stock to Buy Now with 52% Upside Potential; Recommended by CLSA

Synopsis: Brokerages set targets for Avenue Supermarts Limited, such as CLSA ₹6,628, Morgan Stanley ₹5,188, and Jefferies ₹4,500, showing varied growth expectations.

This Large-Cap Stock, engaged in retailing groceries, apparel, and household products through DMart stores, offering value pricing, supply chains, and customer-focused operations across India, is in focus after CLSA gave a High Conviction Outperform target of Rs. 6,628, which has an upside potential of 51.62 percent.

With a market capitalization of Rs. 2,84,925.87 crore, the shares of Avenue Supermarts Limited were currently trading at Rs. 4,369.20 per equity share, down nearly 4.82 percent from its previous day’s close price of Rs. 4,590.70.

What is the News?

CLSA, a prominent brokerage firm, has recommended a “High Conviction Outperform” call on Avenue Supermarts Limited with a target price of Rs. 6,628 per share, indicating an upside potential of 51.62 percent from its current price of Rs. 4,369.20. 

CLSA has given a “High Conviction Outperform” rating to Avenue Supermarts Limited because the company continues to show strong and consistent growth. Its core profit (EBITDA) rose by 25 percent, indicating that the business is expanding efficiently. Even though employee costs increased due to new store openings, the company managed to control other expenses well, which helped margins come slightly above expectations. This shows good cost management and operational strength.

Profit after tax grew by 17 percent, which is still healthy but slightly lower than EBITDA growth due to higher finance costs from short-term loans and lower other income. These higher costs are mainly linked to faster store expansion, which is a positive sign for future growth. Overall, the company’s ability to expand while maintaining stable margins supports confidence in its long-term performance and justifies the positive outlook.

Jefferies has recommended a “Hold” call on Avenue Supermarts Limited with a target price of Rs. 4,500 per share, indicating an upside potential of 2.99 percent. Meanwhile, Morgan Stanley has recommended a “Overweight” call on Avenue Supermarts Limited with a target price of Rs. 5,188 per share, indicating an upside potential of 18.74 percent from its current price.

Q4 FY26 Result Walkthrough:

Coming into the quarterly results of Avenue Supermarts Limited, the company’s consolidated revenue from operations increased by 18.91 percent YOY, from Rs. 14,872 crore in Q4 FY25 to Rs. 17,684 crore in Q4 FY26, and decreased by 2.30 percent QoQ from Rs. 18,101 crore in Q3 FY26.

In Q4 FY26, Avenue Supermarts Limited’s consolidated net profit increased by 19.06 percent YOY, reaching Rs. 656 crore compared to Rs. 551 crore during the same period last year. As compared to Q3 FY26, the net profit has decreased by 23.36 percent, from Rs. 856 crore. The basic earnings per share increased by 18.89 percent and stood at Rs. 10.07 as against Rs. 8.47 recorded in the same quarter in the previous year, FY2025.

Annual Performance of FY26:

Avenue Supermarts Limited’s revenue has increased from Rs. 59,358 crore in FY25 to Rs. 68,821 crore in FY26, which has grown by 15.94 percent. The net profit has also grown by 9.72 percent from Rs. 2,707 crore in FY25 to Rs. 2,970 crore in FY26.

Avenue Supermarts Limited’s revenue and net profit have grown at a CAGR of 23.31 percent and 21.99 percent, respectively, over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 17.2 percent and 13 percent, respectively. Avenue Supermarts Limited has an earnings per share (EPS) of Rs. 45.6, and its debt-to-equity ratio is 0.10x.

Store Expansion:

Avenue Supermarts Limited’s stores are spread across different states in India for 2025-26, with a total of around 500 stores. Maharashtra has the highest number with 128 stores, followed by Gujarat with 75 and Karnataka with 50. Telangana and Andhra Pradesh also have strong presence with 48 and 47 stores respectively, showing good coverage in western and southern regions.

In the northern and central regions, states like Rajasthan (28), Madhya Pradesh (29), and Punjab (24) have a moderate number of stores. NCR has 20 stores, while Uttar Pradesh has only 3. Some smaller regions like Goa, Daman, Uttarakhand, Haryana, and Odisha have just 1 store each, indicating limited presence there.

Company Overview:

Avenue Supermarts Limited was founded in 2000 and is an Indian retail company that owns and operates the DMart supermarket chain. Headquartered in Mumbai, Maharashtra, it is known for its value-retailing model offering a broad range of essential products. Founded by investor Radhakishan Damani, the company has grown into one of India’s largest organized retailers.

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