DMart shares jump 4% after strong Q4 update, but JM Financial calls risk-reward ratio unattractive; here's why

Shares of Avenue Supermarts jumped nearly 4% to Rs 4,518 apiece, on Monday after the company reported a 19% YoY rise in standalone revenue from operations for the January–March quarter of FY26. JM Financial said the earnings beat its estimates and that store additions were a positive surprise, but it still finds the risk-reward unattractive for several reasons.

In an exchange filing, the company announced that its standalone revenue from operations rose to Rs 17,204.50 crore in the fourth quarter of the financial year 2026, up nearly 19% year-on-year (YoY) from Rs 14,462.39 crore reported in the same quarter of the previous financial year. Sequentially, revenue from operations grew around 39% QoQ from Rs 12,393.46 crore in the October-December quarter of the same financial year.

DMart’s revenue from operations has surged more than 66% from Rs 10,337.12 crore reported in the January-March quarter of FY24. Notably, the numbers are provisional, and the final results will be released after the audit.

DMart store count hits 500

Earlier last week, Avenue Supermarts said it opened new stores at three locations in Maharashtra—two in Pune and one in Nagpur; two in Tamil Nadu (both in Chennai); two in Uttar Pradesh (one in Lucknow and one in Greater Noida); one in Faridabad; two in Gujarat (one in Gandhinagar and one in Ahmedabad); and one each in Odisha and Chhattisgarh on Tuesday. This took its total store count to 500.

JM Financial on DMart

JM Financial noted that DMart's Q4 FY26 revenue update suggests a sharp acceleration in same-store sales growth (SSSG) to approximately 10%, as against 6-7% SSSG in the preceding two quarters. The 19% revenue growth in Q4 comes after dismal revenue growth of 13% in Q3 of the same financial year. "Such sharp volatility in the company’s quarterly performance has never been seen before," it added.

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"In addition, store openings accelerated in Q4 with 58 additions, the highest-ever in any quarter; this in turn implies total openings in FY26 of 85 stores, the highest ever in any year. DMart in its last analyst call had highlighted about accelerating store openings; that is finally starting to show up—and shall lead to higher interest, depreciation and rentals (for new leased stores, if any),” the domestic brokerage said, adding that the 34 stores were added in the last eight days of the quarter alone, which should yield benefit into Q1 FY27.

JM Financial hikes target price for DMart

JM Financial increased its FY26-28 revenue estimates by 1-6%, based on revisions to its SSG and store addition estimates. However, it increased EPS estimates only by 0-4% owing to higher interest/depreciation as DMart’s OCF and cash balance shall not be sufficient to fund the growth. “Even so, improved visibility on store openings and acceleration in SSSG warrant an uptick in target P/E to 65x (from 60x). This, coupled with a valuation rollover to Mar’28E lifts our target price to Rs 4,500 (from Rs 3,950),” it said. The latest target price implies an upside potential of nearly 3% from the stock’s previous closing price of Rs 4,362.40 apiece.

The domestic brokerage said that it will actively watch out for margin profile, debt/cash levels, OCF-FCF, capital WIP, mix between food, non-food FMCG and general merchandise, management commentary on reasons for the acceleration in Q4 revenue growth, as well as updates about DMart Ready. It maintained its ‘Reduce’ call on the stock.

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DMart share price

Shares of Avenue Supermarts jumped nearly 4% to trade at Rs 4,518 apiece in the early trading hours of Monday. However, the stock soon pared most of the gains and was trading only marginally higher at Rs 4,395 apiece at around 10.35 am.

The stock has gained more than 11% in one week, and over 18% in 2026 so far.

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