DMart Q1 Results Review: HDFC Securities Maintains 'Add' Rating Though Margin Disappoints — Here's Why

DMart continues to navigate a challenging competitive landscape (courtesy QC players). Store addition pace and margin improvement will be the key monitorables..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 a standalone revenue of Rs 159.3 billion in Q1, reflecting a 16.2% YoY growth. Management attributed the 100-150 bps topline drag to sharp deflation in many staples and non-food products. Q1 FY26 same-store sales growth stood at 7.1%. Sales density grew ~2% YoY to Rs 38.2k/sq. ft. annualized. Margins surprised negatively, with Ebitdam contracting 66bps YoY to 8.2% (our estimate: 8.8%), due to-continued competitive intensity in FMCG (gross margin impact: -27bps YoY),ongoing investments in service level improvements,capacity building costs, andinflation at entry level wages. Given the higher retailing cost and sustained pressure on margins, we have cut our FY26/27 EPS estimates by ~3/2% respectively. However, we maintain our Add rating with a DCF-based target price of Rs 4,000/share, implying 60x Jun-27 P/E..Click on the attachment to read the full report:.DMart Q1 Results Review: Brokerages Bearish On Intensifying Competition, Margin Pressures.DISCLAIMERThis 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.

DMart Q1 Results Review: HDFC Securities Maintains 'Add' Rating Though Margin Disappoints — Here's Why

Given the higher retailing cost and sustained pressure on margins, the brokerage cuts FY26/27 EPS estimates by ~3/2% respectively.

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