DMart continues to navigate a challenging competitive landscape (courtesy quick commerce 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 162.2 billion in Q2 (15.4% YoY growth). Q2 FY26 same-store sales growth stood at 6.8%.
The company added eight new stores in Q2, totaling 17 in H1 FY26. We expect store expansion to accelerate in H2 FY26, supported by increased borrowings.
Sales density grew ~2% YoY to Rs 37.7k/sq. ft. annualized. Gross margin remained largely flat YoY at 14.2% (our estimate: 14.1%). However, Ebitdam contracted 28bps YoY to 7.6% (in-line).
We suspect inflation on entry-level wages and expansion-led front loading of costs have impacted Ebitdam.
We maintain our FY26/27/28 EPS estimates and our Add rating, with a DCF-based target price of Rs 4,000/share, implying 60 times Sep-27 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.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
