Analysts see up to 40% downside in Damani's Avenue Supermarts; here's why

Expensive valuations, risk of a moderation in growth, and the presence of deep pocket players like Amazon and Reliance Retail restricts the near-term upside

Near-term margin concerns and lingering Covid-19 threat have turned analysts cautious on Avenue Supermarts, the owner of DMart chain of retail stores, who see up to 41 per cent downside in the company's stock price. Shares of the company declined 2 per cent to Rs 3,312 on the BSE in the intra-day trade on Monday as most brokerages retained either 'sell', 'reduce' or 'underweight' rating on the stock due to expensive valuation. 

"The stock is trading at rich valuations (55.3x FY23E EV/EBIDA and 87.4x FY23E P/E). Expensive valuations, risk of a moderation in growth, owing to strong traction for online