The share price of Avenue Supermarts Limited, which operates DMart, was dramatic on Monday. The stock slipped more than 2% to a low of Rs 4,388. All this at a time when the company reported its strongest-ever revenue for the July-September quarter – yet why did the stock collapse? There is suspense in the story, because it is not just the numbers – for the first time after years, domestic and foreign brokerages are also divided on the growth of the company.
Business Update—Record in revenue, but…
- In Q2 FY26, Dimart reported standalone revenue of Rs 16,218.79 crore, showing a growth of 15.4%.
- This is bigger than Rs 14,050.32 crore in the same period last year, and a double-digit growth for the third consecutive year.
- The company’s store count reached 432, of which one store (Sanpada, Navi Mumbai) is currently closed due to re-construction.
Why did the market shake?
- The stock closed near 4,417.55 and fell by more than 2% during the day.
- Keeping the rating of ‘SELL’, Goldman Sachs has reduced the target of the share to Rs 3,370.
- According to the brokerage, revenue growth was slow and the pace of new store openings was also slow – reducing growth estimates.
- Revenue growth estimates for FY26 were reduced from 20% to 18%, with a 2% decline in EPS also accounted for.
- JP Morgan has given a target of Rs 4,350 while maintaining its ‘neutral’ rating on the stock.
DMart’s business focus and indications
- The continuously increasing sales point towards DMart’s strong position in the Indian retail market.
- Despite this, competition, slow expansion policy and distrust of brokerages may put pressure on the stock’s movement in the short term.
- The company itself admitted that the figures are provisional—the final report will come only after final review. Detailed quarterly results will be presented to the board on October 11.
For investors?
In the short term, the opinion of leading brokerages and slow growth trend are a sign of big risk, but if the fundamentals remain strong and the demand in the retail market increases, then it will be important to keep an eye on the long-term performance of the company.
