DMart's slowing momentum makes brokerages cautious

Besides high valuations, untested e-commerce venture and pace of expansion are other concerns

The stock of Avenue Supermarts (which runs the DMart chain) is a favourite of investors. Its market capitalisation is higher than the combination of the next 10 listed multi-brand retailers.

However, while investor demand has led to the doubling of the stock since its listing, most brokerages are now cautious, barring a few such as Goldman Sachs and HSBC. Of the 15 analysts who track the stock, says Bloomberg, about two-third have a ‘sell’ or ‘hold’ rating. Their average target price (estimate of where the share price will go) is Rs1,336; the stock is trading at Rs1,538. 

In fact, some