📅 CMP: ₹4063
📆 Period: Quarter Ended June 30, 2025
🏢 Company: Avenue Supermarts Ltd (DMart)
“Revenue in Q1 FY26 grew by 16.2% YoY. Profit after tax grew by 2.1%. Like-for-like growth for 24+ months stores was 7.1%.”
— Neville Noronha, CEO & MD
🔺 Opened 9 new stores, total at 424 stores across 14 states.
🧺 Revenue growth was impacted by deflation in staples & non-food products.
📉 Gross margins under pressure due to higher competition in FMCG.
👥 Higher operating costs from wage inflation and service improvement efforts.
📦 Volume trends were affected by pricing deflation in staples.
🛍️ Cluster-based expansion model continues—focused on dense urban consumption hubs.
🌆 DMart Ready is now present in 24 cities, increasing online + offline synergy.
Margin recovery will depend on inflation trends and competitive pricing.
Operating leverage to improve with festive season approaching.
Urban consumption growth and shift from unorganized retail continues to favor DMart.
Store expansion, tech integration (via DMart Ready), and operational efficiencies remain growth drivers.
Robust revenue and store expansion
Consistent profitability even in margin-pressure environment
Scalable and cost-efficient business model
Margin pressure due to deflation and competitive FMCG pricing
Valuation concerns at ~90x P/E
🎯 Verdict: Hold with long-term positive bias. Investors looking for consistent compounders in the retail space may consider accumulating on corrections.
This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions.