Valuation hurdle stiff for DMart despite 26% correction since January

Store additions strong while same store sales declined in Q1

DMart (Avenue Supermarts), which was once the darling of the bourses, has underperformed the market in the recent past. Since January 2022, the stock has fallen 26 per cent while the Nifty has fallen 11 per cent.  DMart is down 41 per cent from its 52-week high of Rs 5,899 in October 2021.

However, the stock rebounded 3 per cent on Monday following its Q1, 2022-23 update. Morgan Stanley has an Overweight rating on the company, which it reiterated, because standalone Q1 revenue was up 95 per cent year-on-year, led by an increase in store count. Morgan Stanley has a