DMart Q1 Preview: Avenue Supermarts Seen Reporting Modest Margin Expansion After Revenue Miss

Avenue Supermarts Ltd., which operates the DMart supermarket chain, is expected to report higher profit for the June quarter after its business update pointed to steady revenue growth, with investors set to assess whether improving business momentum can offset concerns over quick-commerce competition and store productivity.

The company had earlier reported standalone revenue from operations of Rs 18,343.49 crore for the quarter ended June 30, up 15% from a year earlier, in a business update disclosed to exchanges on July 2. The reported revenue remains subject to a limited review by the company's statutory auditors.

Avenue Supermarts Q1 Preview (Standalone, YoY, Bloomberg Estimates)

• Ebitda seen 15% higher at Rs 1,517 crore versus Rs 1,313 crore

• Ebitda margin seen at 8.26% versus 8.24%

• Net profit seen 16% higher at Rs 964 crore versus Rs 830 crore

Brokerages remain divided on the company's near-term outlook after the June-quarter business update. Bank of America said the update suggested underlying same-store sales growth may have bottomed out and that the core business appeared to be improving, although it cautioned it was too early to conclude that competitive intensity or quick commerce risks had eased. 

The total number of stores as of June stood at 503, the store operator said in its first-quarter business update earlier this month.

Citi remained cautious, citing valuation concerns and continued risks to same-store sales growth and earnings from rising quick-commerce competition, while Macquarie said sales growth and store additions missed its expectations and indicated same-store sales growth moderated from the previous quarter.

ALSO READ: Avenue Supermarts Q4 Results: DMart Operator's Profit, Revenue Rises 19%, Margin Expands

Here's what analysts are expecting from Avenue Supermarts Q1 Results

UBS

• Standalone revenue grew 15.1% year-on-year, below consensus estimates, reversing the acceleration seen in the fourth quarter of FY26.
• Revenue growth would need to return to 18-20% for the stock to outperform.

Jefferies

• Revenue increased 15% year-on-year in the first quarter, in line with the company's pre-quarter update but lower than the previous quarter.
• Store expansion drove growth, with the store network increasing about 20%, while sales per store declined from a year earlier.
• Expect a slight year-on-year decline in margins due to higher other expenses.

Nuvama

• DMart reported 15.1% year-on-year standalone revenue growth, below Nuvama's and Street estimates of 16-18%.
• Sales per store fell 3% year-on-year. Nuvama attributed the decline partly to faster store additions in the previous quarter.
• Weaker revenue growth was a negative surprise after an improvement in momentum in the previous quarter.

IIFL Capital

• Revenue rose 15% year-on-year, in line with the company's pre-quarter business update.
• Sales per store declined 3.7%, while the company added three stores during the quarter.
• Expect Ebitda margin to contract 10 basis points year-on-year to 8.1%.

Axis Capital

• Expect revenue growth to slow to about 15% year-on-year, noting the fourth quarter had benefited from pantry loading.
• Estimate same-store sales growth of about 6%.
• DMart added three stores during the quarter, taking the total store count to 503.
• Expect Ebitda margin to expand 10 basis points year-on-year, supported by gross margin expansion and operating leverage, partly offset by higher employee costs.

ALSO READ: DMart Q1 Results: Date, Time, Dividend News, Earnings Call Schedule And More

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