DMart shares: Radhakishan Damani, others lose Rs 6,100 cr within seconds on Q4 miss

Shares of Avenue Supermarts Ltd (DMart) dropped over 3 per cent in Monday's trade following the March quarter earnings miss by the retailer, resulting in Rs 6,100 crore in notional loss for Radhakishan Damani and other promoters. Radhakishan Damani and his family held 74.65 per cent stake in the company at the end of March 31, 2025. This stake was worth Rs 1,91,144 crore in Monday's trade against Rs 1,97,248 crore on Friday, down Rs 6,100 crore. 

The stock fell 3.55 per cent to hit a low of Rs 3,916.15 on BSE. Later, it was trading 2.77 per cent lower at Rs 3,948. HDFC Institutional Equities said the company's revenue growth of 16.7 per cent YoY was in lune with its estimates, but margins surprised negatively. 

It noted that DMart's Ebitda margin contracted 80 bps YoY to 6.8 per cent due to increased competitive intensity in FMCG category, wage surge in entry-level skilled workforce due to demand-supply mismatch, continued investments to improve service levels, and higher store-expansion led costs. 

"We’ve cut our FY26/27 EPS estimates by 7/4 per cent respectively to account for higher expansion-led costs (especially higher employee and depreciation expenses). However, we maintain our ADD rating with a DCF-based target of Rs 3,850/share (earlier Rs 3,950/share), implying 63 times FY27 P/E," HDFC Institutional Equities said.
  
With the entry of large offline/online retailers into Quick-Commerce (QC), MOFSL expects pricing competition to remain intense over the near term, which could weigh on both growth as well as margins for DMart in the interim. That said, it believes DMart's superior store economics would ensure its competitiveness and relevance to customers over the longer term.

"We cut our FY26-27E Ebitda by 5 per cent each due to heightened competitive intensity and rising CoR, while our FY26-27E EPS is cut by 6-8 per cent. We reiterate our Buy rating with a revised target of Rs 4,350 (against Rs 4,650 earlier)," MOFSL said. 

Nuvama said DMart was able to maintain its 15 per cent-plus growth trajectory for both Q4FY25 and FY25 and that store addition picked up and DMart was able to meet its annual guidance. 

The management has indicated pressure on gross margins driven by higher competitive intensity in the FMCG space. 

On opex, DMart is seeing a surge in wages due to demand-supply mismatch along with elevated investments for building and improving service levels. We are tweaking FY26E/27E revenue slightly and building in softness in margins," Nuvama said while suggesting a fresh target of Rs 4,273 on the stock.