DMart Shares Climb 3% on Strong Q3 Profit; Brokerages Divided
Overview
Avenue Supermarts' DMart reported an 18% rise in Q3 net profit, pushing shares up 3%. While margin expansion impressed analysts like CLSA, others like Citi flagged slowing demand and intense competition, leading to divided outlooks on sustained growth. The stock closed at ₹3,783.
Stocks Mentioned
DMart's Q3 Performance Boosts Shares
Avenue Supermarts, the operator of the popular DMart retail chain, saw its shares gain 3% on Monday following a robust December-quarter earnings report. The stock traded at ₹3,783 on the NSE by late morning, after an initial surge to ₹3,918.60.
Profit Surges, Margins Expand
The company posted a 17.6% jump in standalone net profit after tax for the quarter ended December 2025, reaching ₹923.05 crore from ₹784.65 crore a year earlier. This growth was supported by a gross margin of 14.6%, exceeding consensus estimates and marking a 50 basis points year-on-year expansion. EBITDA margin also improved by 47 basis points, contributing to a 20% rise in EBITDA.
Divergent Analyst Outlooks
Despite the strong headline numbers, brokerage opinions were split. CLSA maintained its 'Outperform' rating and increased its target price to ₹6,185, citing margin strength. In contrast, Citi reiterated a 'Sell' rating with a ₹3,150 target, pointing to a slowdown in same-store growth to 5.6% and potential sustainability issues with margin gains, possibly linked to inventory clearances or discount rationalization amid competition from quick-commerce players.
Competition and Growth Concerns
Jefferies adopted a neutral 'Hold' stance with a ₹4,050 target, noting moderation in revenue growth but a multi-quarter high in EBITDA margins. Nuvama also maintained a 'Hold', attributing profit growth to better gross margins but expressed caution on slower growth run rates. Motilal Oswal reiterated a 'Buy' with an increased target of ₹4,600, highlighting pricing competition from quick commerce as a key monitorable. HDFC Securities maintained an 'Add' rating at a target price of ₹4,000.
