Avenue Supermarts Ltd.: Risk Reward Update

Research evidence excerpt

Avenue Supermarts Ltd.: Risk Reward Update

UpdateM

RiskRisk RewardReward– Avenue- AvenueSupermarts Ltd.Supermarts(AVEU.NS) Ltd. (AVEU.NS)

The juggernaut is rolling

PRICE TARGET Rs5,083.00 OVERWEIGHT THESIS

Residual income model, probability-weighted 25% bull, 60% base, 15% bear. The bear-case ▪We remain bullish on the long-term

weighting reflects risks to growth from the scale-up of new age channels such as e- opportunity given

commerce and quick commerce; while the bull case weighting reflects the long-term industry the substantial addressable market for

opportunity. Key assumptions: grocery and DMart's business model

CoE 11.8% across scenarios strengths.

Terminal growth rate 6.0% base, 6.3% bull, 5.8% bear ▪We believe DMart's growth slowdown was

self-inflicted - its pace of store expansion Rs4,546.59

had not kept pace with the revenue scale of

Consensus Price Target Distribution Rs3,100.00 Rs6,583.00 the company. The sharp acceleration in the MS PT

pace of store expansion in F26 increases ourSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

confidence in DMart's revenue growth

delivery in F27,

▪Overall, we expect DMart's revenue

RISK REWARD CHART growth to improve to 19-20% in F27-F29

(~16% in F26) led by faster store expansion

and improving SSSG trends.

INR

view DMart as a defensive play in the Rs8,302.00Rs8,302.00(+91.66%)Rs8,302.00(+91.66%)(+91.66%) ▪We

discretionary space in an inflationary

8000 environment.

Consensus Rating Distribution

Rs5,083.00Rs5,083.00(+17.34%)Rs5,083.00(+17.34%)(+17.34%) 30% Overweight

Rs4,331.70Rs4,331.70Rs4,331.70 40% Equal-weight

30% Underweight

MS Rating

2000 Source: Refinitiv, Morgan Stanley Research

Rs2,427.00Rs2,427.00(-43.97%)Rs2,427.00(-43.97%)(-43.97%)

0 Risk Reward Themes

MAY '25 NOV '25 MAY '26 MAY '27