Avenue Supermarts shares rise as pundits give ‘buy’ tag with 15% rise in short term

Shares of Avenue Supermarts, owner of DMart, jumped 1.50% in Monday’s trading session as the company announced strong results for the first quarter of FY23 on Saturday. Avenue Supermarts stock opened higher today and continued to rise to hit an intraday high of 4,087.85 levels each on NSE, recording an increase of nearly 1.50% in Monday morning trades.

According to stock market experts, Avenue Supermarts is in an “uptrend” and strong quarterly results should translate into further buying. Thus, any decline in the stock from current levels should be viewed as a buying opportunity, as the stock has a strong support base at 3650 levels each. They said the stock has a minor impediment to 4200 and once it clears this hurdle, it can climb up to 4500 in the next two months.

Speaking on the fundamentals supporting Avenue Supermarts’ share price rise, Ravi Singhal, CEO of GCL Securities, said: “DMart owner Avenue Supermarts reported strong first quarter numbers, as the stock managed to post nearly 5X rise year-over-year (YoY) its net profit and operating income also doubled. Commodities is also a reason for the rise in short to medium term sentiment towards this Indian retail company stock.

On the Avenue Supermarts chart model, Sumeet Bagadia, Executive Director of Choice Broking, said: “Avenue Supermarts’ share price is up. It has strong support in The 3650 levels each and any decline in the stock should be viewed as a buying opportunity by positional investors. This stock has minor resistance at 4200 but once it manages to clear that hurdle it could soon climb to 4500 levels each over the next two months.” He said the stock’s chart pattern indicates a good buy zone in between. 3800 to 3900 levels each.

In the first quarter of FY23, Avenue Supermarts reported an approximately 490% year-on-year increase in standalone net profit to 680 crores against 115 crore in Q1FY22. The company’s operating revenue jumped more than 93.50% to nearly 10,038 crores during the April to June quarter 2022 against 5,183.12 crores in the first quarter of FY2021-22.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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