DMart Stock Surges 6% Ahead of Analyst Meet | PL Capital Maintains ‘HOLD’ as Q1 Misses PAT Estimates
- 30th July 2025
- 02:30:00 PM
- 3 min read
Mumbai | July 30 – As of 1:30 PM, shares of Radhakishan Damani-operated Avenue Supermarts, the company behind India’s DMart retail chain, rose over 6% intraday to ₹4,253 on Wednesday, placing it among the top Nifty Next 50 gainers. The rally comes just ahead of its Q1FY26 Analyst Meet, where the management is expected to outline its aggressive store expansion strategy and address concerns around cost pressures and quick commerce disruption.
The company reported a 16.3% YoY increase in consolidated revenue to ₹16,359 crore for the June quarter, driven by new store openings and healthy performance across mature stores. However, profitability missed analyst expectations. EBITDA margins declined by 74 bps YoY to 7.9%, while net profit came in at ₹773 crore, largely flat compared to the previous year and below consensus estimates of ₹800 crore.
According to PL Capital, the shortfall was primarily due to entry-level wage inflation and the full impact of operating costs from stores launched in Q4FY25. Gross margins also declined by 28 bps YoY to 15.3%. The Avenue Supermarts-operated DMart continues to invest in backend capacity and service quality, which could strengthen future competitiveness but is currently weighing on margins.
Also Read DMart’s Q1FY26 earnings segment performance and much more here
In the quarter, DMart added 9 new stores, taking its total store count to 424. Like-for-like (LFL) sales for stores over two years old grew 7.1% YoY, while average bill value rose 3.1%—a healthy trend amid deflation in staples. That said, bill cuts per store per day fell 1.1%, and the contribution from general merchandise (a higher-margin segment) remained flat at ~25%, still below pre-pandemic levels.
DMart’s online arm, DMart Ready, saw a 19.7% YoY jump in imputed revenue to ₹430 crore. However, management noted that quick commerce is not expected to impact DMart’s core financials in any meaningful way.
From a valuation standpoint, PL Capital flagged that the stock is trading at a rich 75.3x FY27E earnings, leaving limited room for near-term upside unless margins recover.
“DMart remains one of India’s most consistent and efficient retailers. But investors should wait for a clear margin rebound and better performance in discretionary categories before turning more bullish,” PL Capital said.
Bottom line:
PL Capital maintains ‘HOLD’ on DMart after a mixed Q1 showing—strong revenue but weak profitability. The 6% surge in DMart’s share price today signals investor optimism ahead of the Analyst Meet, where all eyes will be on how Radhakishan Damani’s retail juggernaut plans to manage cost pressures and sustain long-term growth.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
