DMart share price: Targets upped for Radhakishan Damani-led firm after Q3 results beat

Radhakishan Damani-led Avenue Supermarts delivered a strong beat on December quarter profit, led primarily by gross margin expansion, analysts said. After several quarters of elevated cost of retailing, DMart reported stable cost of retailing per square foot in the quarter, which drove a 50 basis point expansion in Ebitda margin to 8.4 per cent. While some analysts remained concerned about competition from quick commerce players, they raised their target prices on DMart following the company’s December quarter results.  

"While DMart saw a margin recovery after several quarters, we believe increased pricing competition from QC could prevent margin sustainability and remains a key monitorable in the near term. We believe DMart value-focused model and superior store economics would ensure its competitiveness and customer relevance over the longer term, despite QC’s convenience-focused model," MOFSL said. 

This brokerage upped its target on DMart to Rs 4,600 from Rs 4,300 earlier. 

Systematix Institutional Equities said DMart is unlikely to compromise on its working capital management. It expects the company to maintain its inventory cycle at 34-35 days and net working capital cycle at 24 days. 

Capex for FY25 stood at Rs 3,400 crore. Systematix is building in healthy store additions over FY26E-FY28E which would lead to a gradual increase in capex. 

"We maintain our HOLD rating on DMart with a SOTP-based PT of Rs 4,134 (from Rs 4,055 earlier) based on 38x Dec 2027 EV/Ebitda (35 per cent discount to LPA of 60x) for the offline business and 2x Dec 2027 EV/ sales for the online business," it said.

Antique Stock Broking marginally cut its FY27-28 estimates in view of the intense competition and maintained 'Hold' rating with a revised target price of Rs 4,161 against Rs 3,925 earlier.

"We have concerns on the sustainability of margins due to increased competition from quick-commerce and increased focus on enhancing customer experience. We build in revenue/Ebitda CAGR of 15 per cent/ 14 per cent over FY25–28E" it said.

Nuvama said DMart has historically prioritised revenue growth over margins and focused on maximising throughput by providing more value to consumers. Thus, this quarter’s performance deviates from the historical trend. 

"However, we will await data for a few more quarters before calling out a change in strategy, if that is indeed the case. Given the strong operational beat in Q3 our FY26 EPS estimates go up by 3 per cent; however, our FY27 estimates are largely unchanged and FY28 estimates are cut by 3% largely on account of cut in store opening estimates on slower-than-expected ramp-up in store openings and cut in SSSG estimates," Nuvama said. 

This brokerage cut its target price to Rs 3,950 from Rs 4,100, despite roll-over to December 2027 EPS.