DMart shares: Antique maintains 'Hold' despite margin squeeze in Q1 FY26
DMart: Standalone revenue for Q1 FY26 rose 16.2 per cent year-on-year (YoY) to Rs 15,910 crore, driven by a 13 per cent increase in bill cuts, indicating strong customer footfall.
- Jul 14, 2025,
- Updated Jul 14, 2025 10:09 AM IST
Avenue Supermarts Ltd (DMart), the operator of the DMart retail chain, reported weaker-than-expected profitability for the first quarter of FY26, despite healthy revenue growth, according to a report by Antique Stock Broking.
Standalone revenue for Q1 FY26 rose 16.2 per cent year-on-year (YoY) to Rs 15,910 crore, driven by a 13 per cent increase in bill cuts, indicating strong customer footfall. On a three-year CAGR basis, revenue grew 17.5 per cent. Like-for-like growth for mature stores (operational for at least two years) stood at 7.1 per cent, lower than the 9.1 per cent recorded in the same quarter last year.
Overhead expenses rose due to the addition of nine new stores during the quarter, along with increased employee costs and enhanced service levels. As a result, EBITDA margin declined by 66 basis points (bps) YoY.
The Radhakishan Damani-led retailer ended the quarter with 424 stores and a total retail area of 17.6 million sq ft, up 14 per cent YoY. The average store size remained largely steady at approximately 41,500 sq ft.
DMart's revenue mix in Q1 FY26 -- comprising 56 per cent from food, 20 per cent from non-food and 25 per cent from general merchandise and apparel -- remained broadly consistent with the previous fiscal year.
Antique has raised its revenue estimates for FY26 and FY27 by 1 per cent and 3 per cent, respectively, citing expectations of an accelerated store rollout. The brokerage now anticipates the company to open 70–80 stores annually, higher than its historical average of 50–60.
However, given the sustained cost pressures, Antique has slightly adjusted its EBITDA estimates for FY26E and FY27E. It maintains a 'HOLD' rating on the stock, with a revised target price of Rs 3,980 (up from Rs 3,970), valuing the company at 40x EV/EBITDA on FY27 estimates, implying a P/E of 64x FY27E EPS.
On technical setup, Vaishali Parekh, Vice President – Technical Research & Analysis at Prabhudas Lilladher, highlighted Rs 4,000 as a crucial support level for DMart shares. "A breach below this mark could lead to further downside. Until then, the stock remains a 'Hold'," she told Business Today on Monday.
Meanwhile, DMart was last seen trading 0.97 per cent lower at Rs 4,024.35.
Avenue Supermarts Ltd (DMart), the operator of the DMart retail chain, reported weaker-than-expected profitability for the first quarter of FY26, despite healthy revenue growth, according to a report by Antique Stock Broking.
Standalone revenue for Q1 FY26 rose 16.2 per cent year-on-year (YoY) to Rs 15,910 crore, driven by a 13 per cent increase in bill cuts, indicating strong customer footfall. On a three-year CAGR basis, revenue grew 17.5 per cent. Like-for-like growth for mature stores (operational for at least two years) stood at 7.1 per cent, lower than the 9.1 per cent recorded in the same quarter last year.
Overhead expenses rose due to the addition of nine new stores during the quarter, along with increased employee costs and enhanced service levels. As a result, EBITDA margin declined by 66 basis points (bps) YoY.
The Radhakishan Damani-led retailer ended the quarter with 424 stores and a total retail area of 17.6 million sq ft, up 14 per cent YoY. The average store size remained largely steady at approximately 41,500 sq ft.
DMart's revenue mix in Q1 FY26 -- comprising 56 per cent from food, 20 per cent from non-food and 25 per cent from general merchandise and apparel -- remained broadly consistent with the previous fiscal year.
Antique has raised its revenue estimates for FY26 and FY27 by 1 per cent and 3 per cent, respectively, citing expectations of an accelerated store rollout. The brokerage now anticipates the company to open 70–80 stores annually, higher than its historical average of 50–60.
However, given the sustained cost pressures, Antique has slightly adjusted its EBITDA estimates for FY26E and FY27E. It maintains a 'HOLD' rating on the stock, with a revised target price of Rs 3,980 (up from Rs 3,970), valuing the company at 40x EV/EBITDA on FY27 estimates, implying a P/E of 64x FY27E EPS.
On technical setup, Vaishali Parekh, Vice President – Technical Research & Analysis at Prabhudas Lilladher, highlighted Rs 4,000 as a crucial support level for DMart shares. "A breach below this mark could lead to further downside. Until then, the stock remains a 'Hold'," she told Business Today on Monday.
Meanwhile, DMart was last seen trading 0.97 per cent lower at Rs 4,024.35.