Avenue Supermarts (DMART IN) – Q1FY27 Result Update – Quick commerce continues to dent growth prospects – HOLD
Published on 12 Jul 2026
We believe rising competition from quick commerce is likely to limit growth across Modern trade and D’Mart Ready. D’Mart Ready has exited 14 cities in last 15 months and now is confined to 11 cities with focus on larger towns only. D’Mart plans to raise Rs10bn NCD, we estimate that 1Q27 debt level has increased from Rs11bn to ~25bn YoY. We build in EBITDA margins of 7.4/7.0% for FY27/FY28 versus 7.5% in FY26. We expect the store addition pace to remain elevated with ~75 additions each in FY27/FY28. We estimate an EPS CAGR of 10.7% over FY26–28 and arrive at a DCF-based TP of Rs4103 (No change). We maintain hold with a negative bias given rich valuations of 73.1x on FY28E EPS and limited growth visibility in near term.
