DMart Shares Fall 3% After Muted Profit Growth In Q1FY26, Should You Sell Or Buy? | Markets News
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DMart Share Price: DMart shares are in focus after Q1FY26 results reflecting a flat growth in PAT.
DMart Shares in focus post Q1FY26 results.
DMart Share Price: Shares of Avenue Supermarts, the owner of popular retail franchise DMart, slumped 3 per cent intraday on Monday following the muted earnings for the first quarter of the financial year 2025-26. However, shares recovered at the time of writing this report. At 10:15 am, they were trading at Rs 4050.40 apiece with a fall of 0.33 per cent. The scrip opened in green at Rs 4,090 apiece, against the previous day’s close at Rs 4,063.90 apiece.
DMart reported a standalone net profit of Rs 830 crore in Q1, reflecting a marginal gain of 2 per cent year-on-year from Rs 812 crore in the corresponding quarter of the previous financial year. PAT margin also fell 5.2 per cent in Q1FY26 as compared to 5.9 per cent in Q1FY25.
However, the retail operator’s revenue from operations jumped 16 per cent YoY to Rs 15,932 crore. It was Rs 13,712 crore in the same period last year.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q1FY26 stood at Rs 1,313 crore, as compared to Rs 1,221 crore in the corresponding quarter of last year. EBITDA margin stood at 8.2% in Q1FY26 as compared to 8.9% in Q1FY25.
The retail operator opened 9 new stores during the quarter. The total number of stories stands at 424 as on June 30, 2025.
Commenting on the performance of the company Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts, said: “Our revenue in Q1 FY26 grew by 16.2% over the previous year. Profit after tax (PAT) grew by 2.1% over the previous year. Two years and older DMart stores grew by 7.1% during Q1 FY26 as compared to Q1 FY25. Revenue growth impact of approximately 100-150 bps was primarily due to high deflation in many staples and non-food products. Gross margins are lower as compared to the same period in the previous year, due to continued competitive intensity within the FMCG space. Operating costs are higher due to our efforts on improving service levels, capacity building and inflation at entry level wages.
In the last sessions, shares of Avenue Supermarts settled at Rs 4,068 apiece, down 2.40 per cent from the previous day close at Rs 4,167.85 apiece.
DMart Share Price Target 2025
Nuvama
Nuvama has maintained a Hold rating on Avenue Supermarts with a revised target price of Rs 4,086. The brokerage expects margin pressures to persist due to competitive intensity and has cut its FY26E and FY27E PAT estimates by around 6% and 8%, respectively. With a roll-forward to Q1FY28 PAT, the target has been revised downward from Rs 4,273 to Rs 4,086.
Motilal Oswal (MOSL)
Motilal Oswal has maintained a Buy rating with a target price of Rs 4,500. It noted that Q1FY26 EBITDA grew just 8% YoY—5% below estimates—due to a 25 basis point decline in gross margins and a 9% YoY increase in retail costs per square foot. Revenue rose 16% YoY, largely driven by 14% store expansion, though like-for-like growth slowed to 7.1% amid deflation. The company added nine stores during the quarter, up from six a year ago.
MOSL also highlighted that elevated operating costs stem from efforts to improve service levels, build capacity, and manage wage inflation. Rising competition from quick commerce players could pressure near-term growth and margins, but strong store-level economics are expected to support long-term competitiveness.
The brokerage cut its FY26–28E EBITDA estimates by 2–3% and EPS by 5–6% due to rising costs and higher finance expenses. It expects a compound annual growth rate (CAGR) of 18% in revenue, 17% in EBITDA, and 15% in PAT over FY25–28.
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Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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