Shares of Avenue Supermarts, the operator of the DMart retail chain, declined sharply in Monday's trading session after Citi maintained its Sell rating on the stock with a target price of Rs 3300. The stock fell as much as 6.22 percent to Rs 3575.70 on the NSE.

The selling pressure came despite a strong Q2FY27 business update from the company. Avenue Supermarts reported standalone revenue of Rs 19206 crore for the quarter, representing an 18.4 percent year on year increase. Revenue growth also improved from 15.1 percent in Q1FY27.

A key concern for investors remains the pace of store expansion. Avenue Supermarts added 18 stores during the first half of FY27, compared with 17 stores in the corresponding period of the previous fiscal year. The company added 15 stores during the second quarter, taking its total store count to 518.

Brokerage views on the stock remain divided. While Citi retained its Sell rating and a target price of Rs 3300, CLSA maintained a High Conviction Outperform rating with a target price of Rs 5723. Bernstein also retained an Outperform rating with a target price of Rs 5000, noting that Q2 revenue growth was broadly in line with consensus expectations.

Bernstein said the focus for investors would remain on bill cut growth and the company's gross margin profile. The brokerage expects the company to sustain its store addition pace during FY27, while also expecting Q2 margins to be better than previously anticipated.

The contrasting brokerage views highlight the market's differing assessment of Avenue Supermarts' valuation, growth prospects and store expansion trajectory. Despite the improvement in quarterly revenue growth, concerns over expansion momentum continue to weigh on the stock.