Stock Crash -50 Percent: Big news on stock crash - warning of 50 percent fall in this stock.

News Topical, Digital Desk : Shares of Avenue Supermarts Ltd, the parent company of Radhakishan Damani-owned hypermarket chain DMart, could fall by half from current levels in a bear case scenario, brokerage firm Emkay warned in its report on Monday, April 13.

Emkay initiated coverage on Avenue Supermarts with a Sell rating and a base case target price of Rs 3700 per share . This base case target implies a downside of approximately 15% from current levels.
 

Shares could fall to Rs 2,200.
In a bear case scenario, the brokerage expects the stock to fall to Rs 2,200, a 50% drop from current levels. The brokerage said in its report that at a forward price-to-earnings valuation of 70 times, the stock is pricing in the business that DMart hopes to become, not what it currently is.

According to Emkay, India's quick commerce players are now only 4 to 13 percent more expensive than DMart, and this difference almost disappears after bank discounts. The report also said that sales per square foot have declined by 6 percent since FY20, while the number of dark stores has increased from 421 to 2,000. According to Emkay, DMart still covers only 50 percent of India's total retail addressable market, even though its store count recently reached 500.

The price to earnings growth ratio is 4.2 times, while Trent and Titan are trading at 2.6 times, which seems to price the market to perfection. Out of 29 analysts, 11 have given Buy and Hold ratings to this stock, while 7 have given Sell ratings.

Avenue Supermarts Share Price:
On Friday, Avenue Supermarts share price fell 0.5 percent to close at Rs 4395.2. Currently, it is down 1.42 percent at Rs 4,338.30. In 5 days, the stock has fallen 3.77 percent and in the last one month, the stock has increased by 12 percent.

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