Avenue Supermarts: Should you buy, sell, or hold DMart shares after Q2 results?

Avenue Supermarts (DMart) Share Price Target 2025: Avenue Supermarts, the operator of DMart retail stores, reported a modest 4 per cent year-on-year increase in its September quarter profit at Rs 685 crore, supported by 15 per cent growth in revenue. However, the earnings were below market estimates as margins remained under pressure and same-store growth slowed. Most brokerages maintained cautious views, citing higher costs, weaker profitability, and intensifying competition in the retail segment.

Nuvama on Avenue Supermarts

Nuvama Institutional Equities maintained a ‘Hold’ rating with a revised target price of Rs 4,580 (from Rs 4,544). The brokerage said that while margin pressure is easing, it still persists. Top-line growth momentum has been maintained, and capital work-in-progress (CWIP) at Rs 1,500 crore implies robust store additions over the next six months, Nuvama said.

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Morgan Stanley on Avenue Supermarts

Morgan Stanley retained its ‘Equalweight’ rating with a target of Rs 4,552, noting that Q2 results were below its estimates. EBITDA and PAT were 7% and 14% below our estimates, respectively. LFL growth moderated to 6.8%, and DMart Ready’s presence has been reduced, the brokerage noted.

CLSA on Avenue Supermarts

CLSA, on the other hand, maintained an ‘Outperform’ rating with a target price of Rs 6,300. The brokerage said the miss on sales and profit was largely due to adverse weather, private-label price deflation, and lower sales density at new stores. Employee cost grew 33% YoY, impacting EBITDA. However, stronger store additions signal aggressive expansion, CLSA said.

HSBC on Avenue Supermarts

HSBC remained cautious, maintaining a ‘Reduce’ rating with a target price of Rs 3,700. Gross margin decline has stabilised, but operating expenses remain elevated. We remain concerned about moderating LFL growth amid rising competition, the brokerage stated.

Citi on Avenue Supermarts

Citi reiterated its ‘Sell’ call with a target price of Rs 3,250, citing subdued profitability. EBITDA and PAT grew 11% and 5% YoY, below our estimates. Revenue per square foot grew just 1.3%, while EBITDA per square foot declined 2%, Citi said.

Stock performance

Avenue Supermarts’ shares closed at Rs 4,320 on Friday.