DMart shares tumble 4% as Q1 business update fails to excite; should you buy, sell, or hold?

DMart's Q1 revenue came in at Rs 15,932 crore, higher by 16.2 percent YoY.

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26 Aug, 2025 12:21

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Value retailer Avenue Supermarts Ltd, also known as the DMart parent, saw its shares tumble four percent in the early session on Thursday, July 3, after posting its business update for the quarter ended March, which came in under expectations.

DMart noted that the standalone revenue from operations for the quarter ended June 30, 2025 stood at Rs 15,932 crore, higher by 16.2 percent YoY from Rs 13,712 crore reported in the same quarter last year.

The retail player added that the total number of stores as of June 30, 2025 stood at 424 (including one store at Sanpada, Navi Mumbai, Maharashtra currently closed for customers due to renovation).

At 9.45 a.m., shares were quoting Rs 4,230, down 3.8 percent on the NSE.

International brokerage Morgan Stanley kept its 'underweight' rating intact, with a target price of Rs 3,260 per share. The company’s standalone revenue for Q4 rose by 16.2 percent year-on-year, slightly below the estimated growth of 17.4 percent.

DMart added nine new stores in Q1FY26, up from six in Q1FY25 but significantly lower than the 28 additions in Q4FY25. With the total store count now at 424, the estimated same-store sales growth (SSSG) for the quarter is pegged at around 3–4 percent. The brokerage expects EBITDA margin for Q1 to come in at 7.8 percent, down from 8.7 percent in Q1FY25.

Further, Macquarie also maintained its underperform rating on DMart with a target price of Rs 3,000 per share. The brokerage noted that Q1 sales growth moderated slightly compared to Q4, with a marginal miss against expectations. Given the favourable product mix in the first quarter, which typically supports stronger gross margins, Macquarie expects a sequential improvement in both gross and EBITDA margins.

On the flip side, CLSA reiterated its 'outperform' call, with a target price of Rs 5,549 per share, even as the company’s Q1 standalone revenue was reported to be 2 percent below estimates.