D-Mart IPO: You should book profits in Avenue Supermarts

Most analysts have arrived at a price target of Rs 600-660 over the next year and a half

Given the doubling of the share price since listing on Tuesday, analysts say that investors should book profits and await better entry points (around the Rs 550 mark) in Avenue Supermarts, which runs a chain of retail stores under the D-Mart brand. Avenue Supermarts, which saw a gain of about 114 per cent to Rs 640 (IPO price Rs 299) on listing day, closed marginally lower at Rs 639. The key hurdle for investors is valuation.

At 77 times its annualised nine months FY17 earnings and about 60 times FY18 projections, the stock is clearly in the expensive zone. Amarjeet Maurya