Avenue Supermarts Ltd Sees Robust Value Trading Amid Sector Gains

High-Value Turnover and Market Position

On the trading day, Avenue Supermarts recorded a total traded volume of 5,65,075 shares, translating into an impressive traded value of ₹22,004.42 lakhs. This places DMART among the most actively traded stocks by value on the Indian equity markets, underscoring its liquidity and investor focus. The stock opened at ₹3,852.0 and touched an intraday high of ₹3,918.6, marking a 3.09% rise from the previous close of ₹3,801.3. The last traded price (LTP) stood at ₹3,898.8 as of 09:44:46 IST, reflecting sustained buying interest.

Avenue Supermarts commands a substantial market capitalisation of ₹2,47,610 crores, categorising it firmly as a large-cap stock. Despite the recent downgrade in its Mojo Grade to Sell (from Hold on 31 Oct 2025), the company retains a Market Cap Grade of 1, indicating its dominant position in the diversified retail sector.

Technical and Trend Analysis

The stock’s price action reveals a nuanced technical picture. DMART’s current price is trading above its 5-day and 20-day moving averages, signalling short-term strength. However, it remains below the 50-day, 100-day, and 200-day moving averages, suggesting that medium- to long-term momentum has yet to fully recover. This mixed technical setup may explain the cautious stance reflected in the Mojo Grade downgrade.

Notably, DMART has been on a consecutive gain streak for two days, delivering a cumulative return of 2.7% during this period. This short-term rally aligns with the broader sectoral trend, as the retailing sector gained 2.36% on the same day, outperforming the Sensex, which declined by 0.47%. Such relative strength highlights the stock’s appeal amid sector rotation and selective buying.

Institutional and Investor Participation

Investor participation has been on the rise, with delivery volumes reaching 3.87 lakh shares on 09 Jan 2026, representing a 26.2% increase compared to the 5-day average delivery volume. This surge in delivery volumes indicates genuine accumulation rather than speculative intraday trading, a positive sign for medium-term investors.

Liquidity metrics further reinforce DMART’s attractiveness for institutional and large order flow. The stock’s liquidity supports trade sizes of up to ₹5.9 crores based on 2% of the 5-day average traded value, making it suitable for sizeable portfolio allocations without significant market impact.

Valuation and Quality Assessment

Despite the positive price action, Avenue Supermarts’ Mojo Score stands at 38.0, reflecting a Sell rating. This downgrade from Hold on 31 Oct 2025 suggests concerns over valuation or near-term earnings momentum. The company’s fundamentals remain robust given its leadership in diversified retail, but investors should weigh the current premium valuations against growth prospects and sector dynamics.

Comparatively, the retail sector’s recent 2.36% gain indicates healthy demand, but the broader market’s negative performance (-0.47% Sensex return) highlights selective stock picking. Avenue Supermarts’ ability to outperform the benchmark despite a cautious rating underscores its resilience but also signals the need for careful monitoring of technical and fundamental developments.

Market Context and Outlook

The Indian retail sector continues to attract investor interest due to rising consumer spending and organised retail expansion. Avenue Supermarts, with its DMART brand, benefits from a strong store network and efficient supply chain management, positioning it well for sustained growth. However, macroeconomic factors such as inflationary pressures and input cost volatility remain risks that could impact margins.

Given the mixed signals from technical indicators and the recent downgrade, investors may consider a cautious approach, balancing the stock’s liquidity and market leadership against valuation concerns. Institutional investors appear to be accumulating shares, as evidenced by rising delivery volumes, which could provide a foundation for further gains if broader market conditions improve.

Conclusion: Balancing Momentum with Valuation Caution

Avenue Supermarts Ltd remains a key stock to watch within the diversified retail sector, buoyed by strong trading volumes, rising investor participation, and short-term price momentum. Its status as one of the highest value traded stocks reflects sustained market interest and liquidity, making it a viable option for institutional investors seeking exposure to organised retail.

However, the recent downgrade to a Sell rating by MarketsMOJO, combined with the stock’s position below longer-term moving averages, advises prudence. Investors should closely monitor upcoming earnings releases, sector developments, and broader market trends before committing significant capital.

In summary, while Avenue Supermarts offers attractive liquidity and sector leadership, valuation and technical factors suggest a cautious stance, favouring selective accumulation rather than aggressive buying at current levels.

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