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DMart Shares Dip Post Q4 Results; Brokerages Offer Mixed Recommendations

· · 2 min read

Avenue Supermarts (DMart) shares fell for a second day after its Q4 results showed increased profit and revenue. Brokerages issued mixed ratings, with some recommending 'Buy' while others advised 'Hold' or 'Reduce' amid concerns over operating metrics and debt from store expansion.

Shares of Avenue Supermarts Ltd (DMart) extended their decline for a second consecutive session on Tuesday, trading down 0.47% at Rs 4,353.55 on the BSE. This follows the company's declaration of its Q4 results on Saturday, which presented a mixed picture for investors.

DMart Q4 Performance Highlights

For the fourth quarter, DMart reported a consolidated net profit of Rs 656.42 crore, a notable increase from Rs 550.79 crore in the corresponding quarter last year. Revenue from operations also saw substantial growth, rising to Rs 17,683.86 crore from Rs 14,871.86 crore in the previous year's period.

Despite these steady top-line and bottom-line improvements, the market reaction has been subdued, leading to varied recommendations from brokerage firms.

Brokerage Views: Buy, Hold, or Reduce?

Brokerages have offered a range of advice on DMart shares post-Q4 earnings:

  • Axis Direct maintained a 'Buy' rating, raising its target price to Rs 5,270 per share. The firm highlighted DMart's strategic focus on improving store productivity, enhancing profitability, and recovering its General Merchandise & Apparel (GM&A) segment as key drivers for future earnings growth through FY27.
  • Taking a more cautious stance, PL Capital retained a 'Hold' rating with a target price of Rs 4,410 per share. While acknowledging that EBITDA/PAT surpassed their estimates due to lower retail costs, the brokerage noted that overall operating metrics remained weak.
  • JM Financial reiterated its 'Reduce' call, keeping its target price unchanged at Rs 4,500. The brokerage observed robust Q4 performance and an accelerated store expansion plan, which has shifted the company from a net cash to a net debt position. However, it pointed out that profit after tax (PAT) growth missed expectations largely due to a 22% year-on-year decrease in other income and a spike in interest costs, primarily attributed to increased debt funding for the record 85 stores added in FY26.

Investors are advised to consult with a qualified financial advisor before making any investment decisions.

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