'Buy' DMart Shares Maintains Motilal Oswal Post Inline Q2 Results — Check New Target Price

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Motilal Oswal Report

With quick commerce players potentially shifting their focus to profitable growth, we believe the peak of competitive intensity may be behind us. However, increased pricing competition from the entry of large online/offline retailers in QC remains a key monitorable and could weigh on Avenue Supermarts Ltd.’s near-term growth and margins.

We believe DMart’s value-focused model and superior store economics will ensure its competitiveness and customer relevance over the longer term despite QC’s convenience-focused model.

Acceleration in store addition remains the key growth trigger for DMart. We build in ~60 store additions in FY26 (vs 17/50 store additions in H1 FY26/FY25).

We raise our FY26E Ebitda by ~2%, driven by higher gross margin, while keeping FY27-28 estimates broadly unchanged. Our FY26-28E PAT is broadly unchanged.

We build in a CAGR of 18%/18%/16% in DMart’s consolidated revenue/Ebitda/PAT over FY25-28E, driven by a 15% CAGR in store additions and ~7% LTL growth.

We roll forward our valuation base to Dec’27 (vs. Sep’27 earlier) and assign ~46x EV/Ebitda multiple (implying ~80x Dec’27 P/E) to arrive at our revised target price of Rs 5,000 (earlier Rs 4,800). We reiterate our Buy rating on DMart.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. 

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.