Avenue Supermarts (DMART) reported very strong set of numbers led by store addition and improvement in gross margin. DMART added 8 stores in 1QFY20, which is highest as compared to any other 1Q historically. This is primarily due to spill over (delayed store opening due to time consumed in legal compliance w.r.t property acquisition) from 4QFY19. We expect DMART to add 27 stores in FY20E. Gross margin rose first time after three consecutive quarter of decline, thereby reflecting that the concern on increase in discounting intensity is not structural (long-term) but temporary. We continue to maintain our investment thesis on DMART with a BUY rating and a TP of Rs 1,604....