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Investing.com - Jefferies has raised its price target on Avenue Supermarts (DMART:IN) to INR4,200 from INR4,100 while maintaining a Hold rating on the stock.
The firm noted that while EBITDA margin improved sequentially, the year-over-year contraction continued, resulting in a modest 8% EBITDA growth for the company.
Jefferies attributed the gross margin contraction to high competition in the FMCG space along with mix deterioration, as cited by management. Operating margins were further impacted by investments and rising entry-level staff wages.
The research firm observed that like-for-like revenue growth continued to moderate for Avenue Supermarts, which operates the D-Mart retail chain in India.
Jefferies tweaked its estimates and expects the stock to remain range-bound, leading to the slightly higher price target of INR4,200.
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