DMart shares fall 4% after Q1 results. What are Motilal Oswal, other brokerages saying?

Shares of Avenue Supermarts, the operator of DMart, declined as much as 4% to Rs 3,930 on Monday despite the company reporting an 11.3% year-on-year (YoY) rise in consolidated net profit for the June quarter at Rs 860.6 crore, compared with Rs 773 crore in the corresponding quarter last year.

The company's revenue from operations increased 14.9% YoY to Rs 18,794 crore, up from Rs 16,359 crore in the year-ago period. EBITDA rose 15.4% YoY to Rs 1,499 crore from Rs 1,299 crore in the same quarter last year. The retailer also reported a marginal improvement in EBITDA margin, which stood at 8% for the quarter, compared with 7.9% a year earlier.

Read more: DMart Q1 results: Cons PAT up 11% to Rs 860 crore, revenue rises to Rs 18,795 crore

DMart share price: Buy, sell or hold?

Motilal Oswal Financial Services maintained its Buy rating while raising its target price to Rs 4,800 (17.5% upside) from Rs 4,750. It said Q1 FY27 results were largely in line with expectations, with growth moderating but margins remaining resilient. Revenue at older stores in large metros stayed flat, whereas non-metro stores continued to register healthy growth. The brokerage also noted moderation across product categories and further consolidation of DMart Ready. It expects the company to add 85-90 stores annually during FY27-29 and believes its value-focused business model, superior store economics and strong customer relevance, particularly in Tier 2 and smaller towns, will support long-term competitiveness.


Elara Capital maintained its Accumulate rating with a target price of Rs 4,700 (15% upside), noting that Q1 FY27 revenue growth came in slightly below expectations. The brokerage highlighted flat like-for-like growth in metro stores, while non-metro stores continued to deliver healthy growth of 14-15%. Bills per store declined 4.4% YoY, reflecting pressure on metro store throughput from the structural rise of quick commerce. Gross margin expanded 46 bps YoY, while the rationalisation of DMart Ready's footprint from around 25 cities to 11, along with expected FMCG price hikes and continued store expansion, is seen supporting near-term growth.

Also read: Dmart recasts strategy as rapid delivery competition intensifies

HDFC Securities retained its Add rating with a target price of Rs 4,150 after Q1 FY27 standalone revenue grew 15.1% YoY. The brokerage noted that same-store sales growth moderated to 5.5% from 7.1% a year ago, with metro store growth remaining flat while non-metro stores posted healthy 14-15% like-for-like growth. It has trimmed its FY27 and FY28 earnings estimates by around 3% and 2%, respectively.

Emkay reiterated its Sell rating with a target price of Rs 3,700, saying that while Q1 FY27 performance was in line with expectations, growth indicators continued to weaken. Older metro stores recorded flat growth amid intensifying quick-commerce competition. Customer transactions increased 13.4%, but average bill value rose just 1.5%. Store expansion slowed sharply, with only three stores added during the quarter compared with nine a year earlier. The brokerage also highlighted that DMart Ready's revenue growth slowed to 5.5% and losses widened as the company exited seven more cities to sharpen its focus on large metros. It added that the Rs 10 billion NCD issue indicates continued capital requirements, while the stock's premium valuation of around 70x forward P/E leaves room for de-rating risk.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)