DMart shares hit 11-month low; Analyst cuts target after Q3 update

DMart shares fell over 2 per cent after analysts cut earnings estimates, along with the stock target price, after it reported its third quarter update

Shares of Avenue Supermarts Ltd (DMart) fell over 2 per cent on Monday after analysts cut earnings estimates along with stock target price after it reported the weakest quarterly growth rates in recent years. 

 

The consumer goods' stock fell as much as 2.15 per cent during the day to ₹3,640 per share, the biggest intraday fall since December 18 last year. The stock pared losses to trade 1.6 per cent lower at ₹3,658 apiece, compared to a 0.01 per cent advance in Nifty 50 as of 10:30 AM. 

 

Shares of the company fell to the lowest level since March 12, 2025 and currently trade at 3.5 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 7 per cent in the last 12 months, compared to a 11 per cent advance in the benchmark Nifty 50. DMart has a total market capitalisation of ₹2.37 trillion. 

 

DMart reports Q3 business update

DMart reported standalone revenue from operations of ₹17,612.62 crore for the quarter ended December 31, 2025, up 13 per cent from the same quarter last year, according to an exchange filing. 

 

Revenue stood at ₹15,565.23 crore in the quarter ended December 31, 2024, ₹13,247.33 crore in the corresponding quarter of 2023, and ₹11,304.58 crore in the quarter ended December 31, 2022.

 

As of December 31, 2025, Avenue Supermarts operated 442 stores, including one store in Sanpada, Navi Mumbai, Maharashtra, which is currently closed to customers due to reconstruction.

Analysts on DMart Q3 update

Antique Stock Broking said DMart's revenue is expected to grow 13.2 per cent year-on-year (Y-o-Y) in the third quarter of FY26, implying a two-year CAGR of 16 per cent and marking one of the company's weakest quarterly growth rates in recent years. The brokerage has cut its earnings estimates to reflect the weaker-than-expected Q3 performance and maintained a 'Hold' rating on the stock, while revising its target price to ₹3,925 from ₹4,175 earlier.

 

The brokerage said growth in the quarter was impacted by a shift in the festive season, rising competitive intensity and lower same-store sales growth. DMart added a net 10 stores during the quarter, taking its total store count to 442. Antique expects profitability to remain subdued in the near term due to elevated operating costs and weak performance in the general merchandise and apparel segment. 

 

The brokerage added that aggressive upfront investments in new stores, along with high real estate costs, continue to weigh on return on capital employed. It also expects muted performance in general merchandise and apparel, coupled with ongoing investments to improve customer experience and service offerings, to keep margins under pressure in the near term.  Those at JM Financial said D-Mart's Q3FY26 revenue grew around 13 per cent Y-o-Y, which was 3 per cent lower than their initial estimates of 17 per cent. The growth is also weaker than the company's own growth rates of 16 per cent Y-o-Y in Q1FY26 and 15 peer cent in Q2FY26.  

Dmart added 10 stores on a Q-o-Q basis in Q3, below their estimate of 20 stores during the quarter. Add to it, estimated sales per square feet is likely flat Y-o-Yat ₹9.73 k/sq ft, which, too, is 3 per cent lower even versus Q3FY20 levels of ₹10 k sq ft.  "We estimate a ~40 bps Y-o-Y dip in Ebitda margin to 7.5 per cent in Q3FY26, despite expectations of flat gross margin, largely on account of negative leverage. Overall, we expect 8 per cent Y-o-Y growth in Ebitda to ₹1,330 crore. We expect net profit to grow 3 per cent Y-o-Y to ₹810 crore, largely on account of increase in depreciation expenses and lower other income," it said with a 'Reduce' rating.

  

 

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