DMart shares rebound 36% from 52-week low; here's what analysts say

Shares of DMart (listed as Avenue Supermarts) have recovered 36% from their 52-week low in a year. DMart shares, which hit a 52 week low of Rs 3300.30 on March 28 last year, ended at Rs 4494 on BSE in the previous session. In the same session, DMart shares hit a 52-week high of Rs 4522.85. However, the stock has fallen over 23% from its record high of Rs 5,899.90 reached on October 18, 2021. The stock is in a strong uptrend in the last six sessions. It has gained 14.21% during the period.

The retail stock ended 4.64% higher at Rs 4493.85 against the previous close of Rs 4294.75 on BSE.

Total 0.81 lakh shares of the firm changed hands amounting to a turnover of Rs 36.31 crore on Tuesday. Market cap of the firm climbed to Rs 2.92 lakh crore.

The stock has a one-year beta of 0.2, indicating low volatility during the period.

In terms of technicals, the relative strength index (RSI) of DMart stock stands at 76.2, signaling the stock is trading in overbought zone. Avenue Supermarts shares are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

The PE ratio of DMart stands at 119.98 signaling the stock is overvalued compared to its industry. The PE of the retail industry stands at 106.78.

DMart shares have gained 33.80 per cent in a year and risen 10.51 per cent since the beginning of this year.

Parth Shah, Research Analyst, StoxBox said, "With a market capitalization of Rs. 2.6 lakh crore and a robust cash profit of Rs 880 crores in Q3FY24, DMart is expected to achieve an annualized cash profit of Rs. 4,500 to Rs. 5,000 crores in FY25 and FY26. Furthermore, the projected operating cash flow will lead to an operating cash flow yield of 2.4%. Given these fundamentals, we arrive at a target price of Rs. 5,607, an upside of around 26% from CMP."

Deven Mehata, Equity Research Analyst, Choice Broking said, "Investors, especially those who entered at lower levels, could consider a prudent approach by booking partial profits at the current market price (CMP). Simultaneously, trailing stop-loss orders near Rs 4,144 levels can safeguard profits and manage risks effectively.

For fresh investments, a disciplined strategy involves waiting for potential dips, considering entry points near Rs 4288 levels. Implementing a strict stop-loss at Rs 4144 levels offers a risk management mechanism, ensuring protection against adverse market movements."

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "DMart has given a symmetrical triangle pattern breakout on the daily chart with good volume moving above the resistance zone of Rs 4200 levels after a strong consolidation in the last 2 years in the range of 800 points and is now trading above the cluster of moving averages levels of Rs 3800, which is strong support for the short term. The RSI indicator has also confirmed the buy signal with a trend reversal, and we anticipate this stock to rally up to Rs 5200-5400 levels.

Riyank Arora, Technical Analyst at Mehta Equities said, “The stock has given a good breakout above its recent swing high resistance zone of Rs 4205-4225 on its weekly charts. In Tuesday's session, the volumes in the stock were nearly 3 times its average 30-day traded volumes. As per the current technical structure, the stock looks poised for an uptrend rally towards Rs 4600 and Rs 5000 as momentum extends further. A major support is placed at the Rs 4300 mark, below which the stock would lose its strength."

Aditya Gaggar, Director of Progressive Shares said, "An Ascending triangle formation breakout was spotted in the stock which was confirmed with a trendline breakout in RSI and an upsurge in volume as well. Trend following indicator MACD confirms price activity by giving a positive crossover, ADX further confirms the move with a reading of 26 which indicates the presence of a strong trend. As per the pattern, the target is Rs 4,880. We had already initiated a technical report on the stock on 1st December 2023 at Rs 3,950 with a decline up to Rs 3,860 for the target price of Rs 4,885 and Rs 5,820."