Avenue Supermarts has received a revised price target of ₹6,105 from CLSA, down from the previous target of ₹6,300, yet still indicating substantial upside potential of 63% from Friday's closing price of ₹3,745.10. The revision comes ahead of the company's third-quarter financial results scheduled for Saturday, January 10.

Analyst Maintains Bullish Outlook

CLSA analyst Aditya Soman has maintained a 'High-Conviction Outperform' rating for the retail chain, emphasizing the strength of DMart's fundamental business model. According to Soman, the company's low-cost operator model remains robust, and concerns regarding competition from quick commerce platforms are overdone.

The analyst highlighted DMart's strategic advantages in the competitive retail landscape:

Q3 Business Performance

DMart's Q3 business update revealed solid operational metrics for the quarter ended December 31, 2025:

Strategic Positioning and Market Dynamics

Soman emphasized that DMart's competitive moat continues to strengthen through its virtuous business cycle. The company's ability to operate with low costs allows it to offer competitive prices, leading to high sales velocity and better scale, which further reduces costs and enables market share gains in India's price-sensitive retail market.

The analyst noted that DMart is rapidly scaling its private-label assortment, which is expected to drive the next level of share gains. Additionally, the DMart model is being aggressively expanded to smaller towns, broadening its market reach and customer base.

Earnings Forecast Adjustment

CLSA has trimmed its FY26-28 earnings per share forecast by 1-3% to reflect slower sales growth expectations, which warranted the reduction in the target price. Despite this adjustment, the analyst maintains confidence in the company's long-term prospects and competitive positioning.

Stock Performance Context

DMart's share price has remained relatively flat on a 12-month basis and is trading nearly 24% lower from its 52-week high of ₹4,949.50 achieved in September. While the analyst expects the stock price to remain under pressure given slower sales growth in the near term, the core investment thesis remains intact based on the company's status as the lowest-cost operator in the segment.

Avenue Supermarts , the operator of DMart retail stores, has secured an enhanced commercial paper rating from ICRA Limited, with the rated amount increased substantially from ₹300.00 crore to ₹500.00 crore. The rating agency has reaffirmed its highest [ICRA]A1+ rating while approving the enhanced limit, as disclosed in a regulatory filing dated January 5, 2026.

Rating Enhancement Details

The credit rating action taken by ICRA Limited reflects the company's strong financial position and creditworthiness. The rating committee has maintained the premium A1+ rating while significantly expanding the commercial paper program capacity.

Commercial Paper Program Terms

ICRA Limited has specified important conditions and timelines for the enhanced commercial paper program. The rating agency has outlined that if the instrument is not issued within three months from the rating date, revalidation will be required before issuance. Once issued, the rating remains valid throughout the program's life, with a maximum maturity of twelve months from the issuance date.

The rating enhancement comes with standard regulatory compliance requirements, including immediate notification of any defaults or delays in repayment of interest or principal amounts. Avenue Supermarts must also inform ICRA about any developments that could impact debt servicing capability or any proposals for rescheduling repayment programs.

Regulatory Compliance

The company has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, by informing both BSE Limited and The National Stock Exchange of India Limited about the rating action. The notification was signed by Ashu Gupta, Company Secretary and Compliance Officer, ensuring proper regulatory compliance.

ICRA Limited has also highlighted the implementation of penny-drop verification services as encouraged by SEBI Circular dated November 18, 2024, to prevent payment failures when disbursing principal and interest to investors. This verification method helps confirm bank account details and ensures successful remittance for subsequent transactions.

Credit Rating Significance

The A1+ rating represents the highest credit quality for short-term instruments, indicating the strongest degree of safety regarding timely payment of financial obligations. This rating enhancement from ₹300.00 crore to ₹500.00 crore provides Avenue Supermarts with increased financial flexibility for working capital requirements and short-term funding needs, supporting its retail operations and expansion plans.