DMart Q3 Results Review - Bottom Of The Earnings Downgrade Cycle In Sight: HDFC Securities

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.

HDFC Securities Institutional Equities

Avenue Supermarts Ltd. reported standalone revenue of Rs 155.7 billion in Q3, reflecting a 17.5% YoY increase. Q3 FY25 same-store sales growth stood at 8.3% and sales density grew 3.6% YoY at Rs 38.7k/sq ft annualised.

Management acknowledged to increased discounting intensity in FMCG category in H1 (reducing at the margin). Ebitdam contracted 53 bps YoY to 7.9% (our estimate: 8.4%) owing to high overheads. Note: Cost of retailing remained elevated at 6.1% (versus 5.7% in Q3 FY24). DMart Ready business grew 21.5% in 9MFY25.

Mr. Neville Noronha has decided to step down as MD and CEO by January 2026. Anshul Asawa will be appointed as the next CEO. While we marginally cut our FY26/27 EPS estimates by 2% each; it seems DMart might be closer to the end of its earnings downgrade cycle; hence, we recently (Q3 FY25 preview note) upgraded the stock to an ADD rating with a DCF-based target price of Rs 3,950/share, implying 60x FY27E P/E.

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.