SYNOPSIS: DMart shares are in focus after Q1 FY27 results and brokerage updates. Revenue rose 14.9% YoY to ₹18,795 crore, while profit grew 11.3% to ₹860 crore. Brokerages remain divided, with Morgan Stanley and Bernstein positive, while Citi flags growth and competition risks.
The shares of the large-cap company, which specializes in organized value-retailing through a chain of supermarkets and hypermarkets, are in focus following their Q4 results and Brokerage views.
With a market capitalization of Rs. 2,59,874.36 crores in the day’s trade, the shares of Avenue Supermarts Ltd declined upto 4.2 percent, making a low of Rs. 3,910.00 per share compared to its previous closing price of Rs. 4,083.05 per share.
What happened
Its Revenue from Operations increased by 14.9 percent YoY from Rs. 16,360 Crores in Q1FY26 to Rs. 18,795 Crores in Q1FY27, and it increased by 6.3 percent QoQ from Rs. 17,684 Crores in Q4FY26 to Rs. 18,795 Crores in Q1FY27.
Its net profit increased by 11.3 percent YoY from Rs. 773 Crores in Q1FY26 to Rs. 860 Crores in Q1FY27, and increased by 31.1 percent QoQ from Rs. 656 Crores in Q4FY26 to Rs. 860 Crores in Q1FY27. The earnings per share (EPS) for the quarterly period stood at Rs. 13.19, compared to Rs. 11.88 in the previous year’s quarter.
Brokerage views on the result
Morgan Stanley on Dmart
Morgan Stanley maintains an Overweight rating on Avenue Supermarts with a target price of Rs 5,083. Q1 margins were broadly in line with expectations, while muted revenue growth remains a key concern. A recovery in top-line growth will be important for improving earnings momentum and investor confidence.
Management commentary highlighted rising competition from quick commerce players, especially in metro markets. Morgan Stanley believes this could weigh on near-term growth prospects and customer traction. However, the company continues to strengthen its core retail operations and leverage its established market position.
Morgan Stanley retains its Overweight stance, supported by Avenue Supermarts’ large total addressable market, resilient business model, and strong execution capabilities. The brokerage awaits further insights from the annual investor meeting, typically scheduled during July or August, for additional growth outlook.
Bernstein on Avenue Supermarts
Bernstein maintains an Outperform rating on Avenue Supermarts with a target price of Rs 5,000. The brokerage believes the latest results highlight the resilience of the DMart business model despite increasing competition from quick commerce platforms. Averaging Q4 and Q1 performance provides a better view of near-term trends.
It expects store expansion to remain above 80 additions, though partly supported by debt. The brokerage finds the company’s ability to sustain gross margins along with positive same-store sales growth despite competitive pressures impressive. It also expects the cost structure to become more supportive over the next few quarters.
Bernstein believes DMart Ready remains more of a distraction than a differentiator, suggesting investors should avoid focusing on a segment where the company has not yet established a clear solution. The brokerage continues to remain positive on the company’s long-term growth potential and operating strengths.
Citi on Avenue Supermarts
Citi maintains a Sell rating on Avenue Supermarts and has reduced the target price to Rs 3,400 from Rs 3,650. The brokerage highlights that Metro’s same-store sales growth has stalled as pressure from quick commerce players continues to intensify.
It notes that profit growth has trailed revenue growth in 10 of the last 13 quarters, driven by increased competition, lower other income, and higher interest expenses. The brokerage has cut FY27-29 revenue estimates by 4-6% and EPS estimates by 5-7%.
They believe the current risk-reward remains unfavorable and recommend investors wait for a better entry point and valuation. The brokerage remains cautious on near-term growth prospects due to competitive pressures and margin headwinds affecting the company’s performance.
Company Overview & Others
Avenue Supermarts Ltd is an Indian retail company that owns and operates the DMart supermarket chain. The company focuses on providing everyday products such as groceries, food items, personal care products, home essentials, clothing, and general merchandise at competitive prices. Its business model is based on offering value-for-money products through a large network of stores across India.
Avenue Supermarts Ltd has maintained a strong store expansion strategy, increasing its DMart outlets from 324 in FY23 to 500 in FY26. This steady growth highlights the company’s focus on strengthening its retail network and reaching more customers across India.
In Q1 FY27, DMart’s store count increased further to 503, showing continued expansion momentum. The company’s consistent addition of stores supports its long-term growth strategy in the organized retail sector.
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