Stock Market Today: Avenue Supermarts (DMart) share price declined more than 2% in the morning trade on Monday, July 14, after the company announced its Q1 results, post-market hours, on Friday.
Avenue Supermarts Q1 Results Review
Radhakishan Damani-promoted Avenue Supermarts reported a 0.1% decrease in Q1FY26 net profit to ₹772.81 crore, from ₹773.68 crore in the same quarter of the previous year.
The margin pressure continues taking a toll, even as the company reported revenue for the April-June quarter stood at ₹15,932 crore, a 16.19% increase from a year earlier. However, concerns around operating performance are reflected in analysts’ views and share price trends.
Avenue Supermarts—Analysts’ views and recommendations
Jefferies India Pvt Ltd said that for Avenue Supermarts, it was a lacklustre start to the year. As per Jefferies, gross margin was impacted by continued high competitive intensity in the FMCG space.
“Operating EBITDA margin declined YoY due to lower gross margins and higher operating costs (investments in improving service levels, capacity building, and inflation at entry-level wages),” the brokerage said. EBITDA stands for earnings before interest, tax, depreciation and amortisation.
Jefferies has tweaked its estimates and expects the stock to be range-bound with a slightly higher price target at ₹4,200.
Motilal Oswal Financial Services (MOSL) also said that Avenue Supermarts posted another weak set in 1QFY26 as standalone EBITDA grew 8% YoY (which was a 5% miss to their estimates) due to weaker gross margin.
MOSL also cut its FY26-28 EBITDA estimates by ~2-3% due to lingering pressure on gross margins and rising CoR (cost of revenues), while it reduced its FY26-28 estimated earnings per share by 5-6% on higher finance costs. MOSL builds in a CAGR of 18%, 17%, and 5% in DMart’s consolidated revenue, EBITDA, and net profit growth, respectively, over FY25-28. However, it still reiterated a ‘BUY’ rating with a revised target price of ₹4,500 per share (lower compared to ₹4,800 earlier), which, as per MOFSL, is premised on 46 times Jun’27 estimated enterprise value by EBITDA.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies and not of Mint. We advise investors to check with certified experts before making any investment decisions.
