A leading retail stock is poised for strong growth, backed by rapid store expansion, rising food revenue share, and robust Q1FY26 performance. Analysts project a 50% upside, citing strategic focus on private labels, e-commerce, and deeper market penetration across high-potential regions.
India’s diversified retail sector is experiencing dynamic growth, with the overall market valued at over $1.2 trillion in 2025. The first half of the year saw a remarkable 69% year-over-year increase in retail space absorption across top cities. This expansion is driven by both brick-and-mortar stores and a booming e-retail market, which has surged to a gross merchandise value of approximately $60 billion.
With a market capitalization of Rs 2.78 lakh crore, the shares of Avenue Supermarts Ltd were trading at Rs 4,286.10 per share, increasing around 0.02 percent as compared to the previous closing price of Rs 4,285.15 apiece.
Brokerage Recommendations
CLSA, one of the well-known brokerages globally, has given a ‘High Conviction Outperform’ rating on this retail stock with a target price of Rs 6,408 apiece, indicating a potential upside of 50 percent from Thursday’s price of Rs 4,286 per share.
CLSA noted that Avenue Supermarts is prioritizing faster store expansion to boost sales growth. It highlighted the company’s increasing focus on private labels, viewing it as a crucial strategy to strengthen its long-term competitive advantage in the retail sector.
The brokerage also added that margins may stay volatile in the near term due to ongoing business expansion. However, the company’s clear strategy for its e-commerce arm, DMart Ready, focuses on effectively balancing value and convenience to drive long-term growth.
CLSA highlighted strong confidence in Indian retail’s long-term growth potential, calling it a major multi-decadal opportunity. The company is accelerating expansion in Northern India under Neville Noronha’s leadership. Recently, it opened a new store in Pathankot, Punjab, raising its total store count to 426, following another launch in Pune just a week earlier.
Also read: Solar stock to buy now for an upside of 27%; Recommended by ICICI Securities
Q1FY26 Highlights
Avenue Supermarts Ltd reported a 16 percent revenue growth in Q1FY26, rising to Rs 16,360 crore from Rs 14,069 crore in Q1FY25. However, net profit remained almost flat, slipping marginally by 0.12 percent to Rs 773 crore from Rs 774 crore in the same period.
Avenue Supermarts revenue mix in FY25 shows foods leading with 57.73%, up from 56.95% in FY24, driven by groceries, staples, and processed foods. Non-food FMCG contributed 20.01%, slightly lower than 20.68% earlier, while general merchandise and apparel held steady at 22.26%, highlighting balanced growth across diverse product categories.
The cluster-based expansion strategy shows strong growth, with stores rising from 55 in 2011–12 to 415 projected in FY25. Maharashtra, Gujarat, Karnataka, and Telangana remain key hubs, while newer regions like Punjab, Madhya Pradesh, and Chhattisgarh are gaining traction, reflecting a focused push into high-potential markets for deeper penetration and sustained retail growth.
A prominent ace investor, Radhakishan Shivkishan Damani, owned 14,98,48,238 equity shares, which are equivalent to 23.03 percent of the company, as of June 2025.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Financially strong stock to buy now for an upside potential of 50%; Recommended by CLSA appeared first on Trade Brains.