Avenue Supermarts shares drop 3% as analysts expect muted Q2 earnings

Shares of Avenue Supermarts Ltd, which operates the DMart retail chain, fell nearly 3 per cent on Monday as analysts expect the company to post muted September quarter earnings. 

 

The retail chain's stock fell as much as 2.7 per cent during the day to ₹4,300 per share, the biggest intraday fall since September 10 this year. The stock pared losses to trade 2.3 per cent lower at ₹4,310 apiece, compared to a 0.04 per cent decline in Nifty 50 as of 9:30 AM. 

 

Shares of the company fell for the fourth straight session and currently trade at 4.5 times the average 30-day trading volume, according to Bloomberg. The counter has risen 21 per cent this year, compared to a 5.3 per cent advance in the benchmark Nifty 50. Avenue Supermarts has a total market capitalisation of ₹2.8 trillion. 

 

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Avenue Supermarts Q2 update

The operator of the DMart retail chain reported standalone revenue from operations of ₹16,218.79 crore for the quarter ended September 30, 2025.

 

This marks a 15 per cent increase from ₹14,050.32 crore in the same period last year. The company’s revenues in the corresponding quarters of 2023 and 2022 stood at ₹12,307.72 crore and ₹10,384.66 crore, respectively.

 

As of September 30, 2025, Avenue Supermarts operated 432 stores, including one outlet in Sanpada, Navi Mumbai, that remains closed for reconstruction. Its stores focus on three key categories: food, FMCG (non-foods), and general merchandise, including apparel. 

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Analysts on DMart Q2 update

According to Antique Broking, profitability for DMart is expected to remain subdued due to elevated operating costs and rising competitive intensity. The brokerage noted that DMart’s expansion into northern India, particularly Uttar Pradesh, offers significant growth potential. 

 

However, return on capital employed (RoCE) may stay under pressure in the near term, given the large number of stores under development. Avenue Supermarts aims to increase its store count by 10-15 per cent year-on-year, having added 17 net stores in the first half of the financial year. Antique Broking expects 70-80 stores to be added in the financial year 2025–26.

 

The firm anticipates revenue and Ebitda to grow at a compound annual growth rate (CAGR) of 17 per cent and 16 per cent, respectively, over financial years 2024–25 to 2027–28. It maintained a 'Hold' rating on the stock with a target price of ₹4,175.

 

Productivity remains weak at DMart, analysts at Motilal Oswal said in a note. The brokerage highlighted that the company has been under margin pressure in recent quarters, and with likely muted same-store sales growth (SSSG), margin challenges are expected to persist in the second quarter of FY26.