Avenue Supermarts, the parent company of retail giant DMart, witnessed a sharp surge of nearly 7% in its stock price today, and closed around Rs 4,270 On NSE. This sudden spike comes after the company hosted an analyst meet and released a press statement highlighting significant expansion plans. The rally has garnered investor attention and analysts are now closely watching the stock’s technical breakout zone around Rs 4500. But what exactly triggered this optimism?
The Shift in Strategy: Physical Expansion to Counter E-Commerce Threat
Over the past few quarters, Avenue Supermarts was facing growth concerns. Market participants were wary of its sluggish pace compared to aggressive e-commerce players. The competition from online retail platforms, particularly in terms of pricing and discounting, had started impacting DMart’s growth trajectory. The company management had also acknowledged these challenges in its commentary across recent quarters.
However, in the last two quarters, there has been a visible shift in DMart’s strategy. Instead of attempting to compete with e-commerce platforms on price, the company has doubled down on its core strength — physical store expansion.
Focus on Store Count: Aggressive Expansion Plan in FY25
Today’s analyst meet and press release highlighted this renewed focus. The company revealed that it has recently opened a new store in Punjab. Just weeks ago, another new store was launched in Uttar Pradesh. This aggressive push into physical retail is being seen as a long-term strategic move to retain its dominance in offline grocery and daily needs retail.
DMart management made it clear during the analyst interaction that they are committed to investing further into physical stores. The idea is simple — the only way to counter heavy e-commerce discounting is by increasing offline touchpoints, which drive footfall and sales.
18–20% Growth Target with ROI Focus
The management reiterated its focus on achieving 18% to 20% annual growth, while maintaining healthy Return on Investment (ROI). This growth will be largely driven by consistent store additions, which the company believes will enhance market penetration and revenue over time.
A Look at Store Expansion Over the Years
According to data uploaded by the company on the BSE, Avenue Supermarts has shown steady growth in store count:
In FY22, the company added 22 stores, taking the total count to 234
Since then, every fiscal year has seen consistent store additions
In FY25 (only half the year has passed), the company has already opened approximately 50 new stores
With the new Punjab store inaugurated today, the total operational store count has reached approximately 426. DMart has also highlighted that by the end of FY25, around 415 stores will be fully operational and funded.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Readers are advised to consult with a certified financial advisor before making any investment decisions. The author and publisher are not responsible for any financial losses arising from investments based on this content.
