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'Reduce' DMart Shares Maintains Dolat Capital Post Q1 Results — Check Revised Target Price

Dolat Capital rating reflects near-term weak performance, competition from Qcom and rich valuations; bias remains positive.

<div class="paragraphs"><p>Accelerated store expansion, soft base, category-mix improvement, new launches and built-up in DMart Ready are potential triggers.</p><p>(Photo: Vijay Sartape/NDTV Profit)</p></div>
Accelerated store expansion, soft base, category-mix improvement, new launches and built-up in DMart Ready are potential triggers.

(Photo: Vijay Sartape/NDTV Profit)

DMart’s standalone revenue growth was a tad soft at 16.2% YoY. Growth was impacted by 100-150 bps due to deflation in many staples and non-food products. The same-store sales growth for two-year and older stores (~327 or 77% of stores) was 7.1% YoY. Yet, Revenue/sqft growth was 1.5% and rev/store 1.9% YoY. This implies softer revenue contribution from newer stores in the brokerage's view.
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