DMart plunges 6.7% as Citi, Goldman retain sell call

Mumbai: Shares of Avenue Supermarts, the operator of DMart, fell 6.7% on Monday, marking their steepest single-day decline in nearly two years, as Citi and Goldman Sachs retained their sell ratings after the company's second-quarter business update amid concerns over rising quick-commerce competition and the stock's expensive valuation.

The stock closed at ₹3,555 after posting its sharpest one-day drop since October 14, 2024. Citi retained its target price of ₹3,300, while Goldman Sachs' target was ₹3,800.

Citi said it remained cautious on Avenue Supermarts because of its expensive valuation, at 61 times estimated FY28 earnings, and risks to same-store growth and earnings from increasing competition in quick commerce.


"Sustained accelerated store expansion and improved throughput will be key to support valuation multiples," Citi said.

It is now down around 6% so far this year. The benchmark Sensex and Nifty have gained 0.6% each.

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Avenue posted standalone revenue growth of 18.4% YoY in the second quarter of FY27, accelerating from 15.1% in the first quarter. Avenue added 15 stores in the second quarter, taking additions in the H1 of FY27 to 18, compared with 17 in the year-earlier period.

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Goldman Sachs said its 'sell' thesis is based on a mismatch between Avenue's growth prospects and valuation. It expects revenue growth to moderate to below 20% going forward, compared with around 30% earlier, as rising competition from quick-commerce platforms such as Blinkit and Swiggy, as well as larger retailers such as Reliance, weighs on same-store sales growth. "We expect the competitive intensity to continue to rise in large cities, and thus put pressure on Avenue's same-store sales growth," Goldman Sachs said in its latest report.