Shares of Avenue Supermarts (DMart) closed 1.26 per cent lower after falling 3 per cent in early trade on Monday following a flat net profit in Q1 FY26and a 80 bps lower operating margin on high competitive intensity in the FMCG segment and higher operating costs.
The margin pressures have triggered a bag of mixed reactions from leading brokerages, post which the stock depreciated.
Axis Securities maintained buy at a slashed target price of ₹4,810 from ₹5,091. Cautiously optimistic, the brokerage highlighted that despite challenges posed by subdued demand in recent years, DMart’s strategic emphasis on boosting store productivity, enhancing profitability, and revitalising the general merchandise & apparel (GM&A) segment indicates a clear course correction.
Motilal Oswal reiterated buy at a revised target price of ₹4,500. We believe DMart’s value-focused model and superior store economics would ensure its competitiveness and customer relevance over the long term, despite QC’s convenience-focused model. However, rising competition on pricing could continue to weigh on growth and margins in the near term,” it said.
Nuvama Institutional Equities estimated that pressure in margins shall continue, given the competitive trends. Nuvama trimmed PAT estimates for FY26 by 6 per cent and for FY27 by 8 per cent. Maintaining hold, the brokerage lowered the target price on the stock from ₹4,273 to ₹4,086 per share.
HDFC Securities analysts observed that DMart continues to navigate a challenging competitive landscape. Store addition pace and margin improvement will be the key monitorables. They brokerage maintained add rating at ₹4,000 target price per share.
JPMorgan maintained neutral stance at ₹4,150. “Like-for-like (LFL) growth of 7 per cent and increased expansion reflect intent, but margin softness is likely to persist near-term,” it said.
Morgan Stanley assigned underweight rating at a target price of ₹3,350, noting that the Q1 performance was weak on both topline and margins, and added that the company’s continued investments to counter competition are likely to weigh on the business.
HSBC has retained a reduce rating at ₹3,600. It flagged that EBITDA and margin performance in Q1 were slightly below an already-muted consensus.
Macquarie has an underperform rating with the lowest street target price of ₹3,100.
DMart stock closed 1.26 per cent lower at ₹4,012.80 on the BSE, hitting an intraday low of ₹3,928.85. It opened at ₹4,090 against the previous close of ₹4,063.90.
Published on July 14, 2025