profitfromit1@gmail.com

🛒 Avenue Supermarts (DMart): The Retail Compounder of India

Lesson 68/225 | Study Time: 15 Min

Course: Top Quality Companies

🛒 Avenue Supermarts (DMart): The Retail Compounder of India

📘 Store-led Growth, Margin Stability, & Long-Term Wealth Potential: 1st August 2025

🏢 Company Overview

Avenue Supermarts Ltd., the operator of DMart retail chain, is India’s most profitable and efficient food and grocery retail business. Founded by Radhakishan Damani, DMart follows a low-cost, high-turnover model with high inventory efficiency, focused on delivering value to consumers in essential categories like food, FMCG, and general merchandise.
With over 424 stores (as of FY26), the company has built a strong moat in retail operations, supply chain, and cost control.

🛍️ Indian Retail Industry Outlook

India’s retail market is expected to cross $2 trillion by 2030, with organized retail penetration growing from 12% to ~25%+

Grocery retail, where DMart operates, remains underpenetrated

Rising urbanization, nuclear families, and shift to value retail = Long runway

📈 DMart is uniquely positioned as a category leader in the offline grocery segment.

🕰️ Historical Growth: Stores, Revenue & Profit

Year
Stores
Revenue (₹ Cr)
Net Profit (₹ Cr)
FY2012
57
2,209
61
FY2016
110+
8,588
321
FY2020
214
24,870
1,301
FY2023
324
42,839
2,373
FY2025
415
59,358
2,707
FY26E
473
69,152
3,250
📌 7X growth in 7 years (Chart below)
📍 Revenue CAGR (FY16–FY25): ~22%
📍 Profit CAGR (FY16–FY25): ~26%

📊 Profitability & Margin Trends

Year
NPM %
FY2012
2.8%
FY2016
3.7%
FY2020
5.2%
FY2023
5.5%
FY2025
4.6%
FY26E
4.7%

🟢 Margins remain stable, indicating pricing power and operational efficiency despite cost inflation.

🧾 Q1 FY26 Results Snapshot

Metric
Q1 FY26
Q1 FY25
YoY Growth
Revenue (₹ Cr)
16,360
14,069
16%
Profit (₹ Cr)
773
774
Flat (0%)
EPS (₹)
11.88
11.89
Flat
Margin (%)
4.7%
5.5%
↓ -0.8%
Like-to-like Sales
7.10%
9.10%
↓
Stores
424
371
↑ 53 stores
⚠️ Margin dip due to cost increase and flat EPS – a short-term blip.

🔍 Cost Breakdown – Q1 FY26

Major Cost Head
Value (₹ Cr)
Share (%)
Growth YoY
Stock-in-trade
13,732
90%
15%
Employee Cost
347
2%
30%
D&A
232
2%
20%
Other Expenses
859
6%
22%
Finance Cost
29
0%
81%

📉 Historical Valuation Trends

Year
Low PE
High PE
FY2018
50
110
FY2020
59
124
FY2022
116
256
FY2024
86
117
FY25-TTM
90
110

Year
Low PBV
High PBV
FY2018
8
19
FY2020
7
15
FY2022
13
28
FY2025
10
17
FY26-TTM
11
13

📌 Premium valuations reflect market trust in DMart's long-term visibility and execution.

📅 Growth Projections – FY26 to FY35

Year
Stores
Revenue (₹ Cr)
Net Profit (₹ Cr)
EPS
Margin
FY26E
473
69,152
3,250
49.6
4.7%
FY30E
693
1,43,394
6,621
101
4.6%
FY35E
1,116
2,88,416
13,318
203
4.6%

💸 Valuation-Based Price Range

Year
EPS
Book Value
Low (₹)
Fair (₹)
High (₹)
FY26E
49.6
₹379
₹3,470
₹4,214
₹4,957
FY30E
101
₹785
₹7,069
₹8,584
₹10,099
FY35E
203
₹1,580
₹14,219
₹17,266
₹20,313

📦 Portfolio Allocation Guidance

Metric
Allocation %
EPS-Based Weight
1.81%
Book Value-Based
2.20%
PEG Ratio-Based
0.81%
Actual Weight
1.61%

🔍 Suitable as a core holding in a quality, consumer-centric long-term portfolio.

📈 Technical View

✅ Return: 7X in last 7 years
🎯 Target FY26: ₹6,165 – Consider booking 5%
🟢 Buy Zone: ₹3,609 for long-term investors
📉 Consolidation with steady breakout attempts—ideal for staggered entry

✅ Conclusion: Long-Term Risk–Reward

🟢 Positives:
Consistent revenue & profit growth

Best-in-class operations in grocery retail

Strong brand, store productivity, and balance sheet

⚠️ Risks:
High valuations = less margin of safety

Online grocery/quick-commerce competition

Slower store expansion or margin pressure

📌 Investor View:
DMart remains a secular growth compounder for patient investors. Use correction zones like ₹3,600–₹3,800 for accumulation with a 5–10 year horizon.

Fairvalue ProfitModel:
https://docs.google.com/spreadsheets/d/e/2PACX-1vT0nrXQBVJLqPWFJhCMX2FFhR3-xecBI3i98HAw04Qd0qvxa4b9nMQlBg5XYtAKjpuhtrSIwnMOeMQN/pubhtml?gid=1061269236&single=true

📢 Disclosure

This report is for educational purposes only and not investment advice.

Previous Lesson Next Lesson

Product Designer

4.83

Profile

🛒 Avenue Supermarts (DMart): The Retail Compounder of India

🛒 Avenue Supermarts (DMart): The Retail Compounder of India

📘 Store-led Growth, Margin Stability, & Long-Term Wealth Potential: 1st August 2025

🏢 Company Overview

🛍️ Indian Retail Industry Outlook

🕰️ Historical Growth: Stores, Revenue & Profit

YearStoresRevenue (₹ Cr)Net Profit (₹ Cr)FY2012572,20961FY2016110+8,588321FY202021424,8701,301FY202332442,8392,373FY202541559,3582,707FY26E47369,1523,250📌 7X growth in 7 years (Chart below) 📍 Revenue CAGR (FY16–FY25): ~22% 📍 Profit CAGR (FY16–FY25): ~26%

📊 Profitability & Margin Trends

YearNPM %FY20122.8%FY20163.7%FY20205.2%FY20235.5%FY20254.6%FY26E4.7%🟢 Margins remain stable, indicating pricing power and operational efficiency despite cost inflation.

🧾 Q1 FY26 Results Snapshot

MetricQ1 FY26Q1 FY25YoY GrowthRevenue (₹ Cr)16,36014,06916%Profit (₹ Cr)773774Flat (0%)EPS (₹)11.8811.89FlatMargin (%)4.7%5.5%↓ -0.8%Like-to-like Sales7.10%9.10%↓Stores424371↑ 53 stores⚠️ Margin dip due to cost increase and flat EPS – a short-term blip.

🔍 Cost Breakdown – Q1 FY26

Major Cost HeadValue (₹ Cr)Share (%)Growth YoYStock-in-trade13,73290%15%Employee Cost3472%30%D&A2322%20%Other Expenses8596%22%Finance Cost290%81%

📉 Historical Valuation Trends

YearLow PEHigh PEFY201850110FY202059124FY2022116256FY202486117FY25-TTM90110

YearLow PBVHigh PBVFY2018819FY2020715FY20221328FY20251017FY26-TTM1113📌 Premium valuations reflect market trust in DMart's long-term visibility and execution.

📅 Growth Projections – FY26 to FY35

YearStoresRevenue (₹ Cr)Net Profit (₹ Cr)EPSMarginFY26E47369,1523,25049.64.7%FY30E6931,43,3946,6211014.6%FY35E1,1162,88,41613,3182034.6%

💸 Valuation-Based Price Range

YearEPSBook ValueLow (₹)Fair (₹)High (₹)FY26E49.6₹379₹3,470₹4,214₹4,957FY30E101₹785₹7,069₹8,584₹10,099FY35E203₹1,580₹14,219₹17,266₹20,313

📦 Portfolio Allocation Guidance

MetricAllocation %EPS-Based Weight1.81%Book Value-Based2.20%PEG Ratio-Based0.81%Actual Weight1.61%🔍 Suitable as a core holding in a quality, consumer-centric long-term portfolio.

📈 Technical View

✅ Return: 7X in last 7 years 🎯 Target FY26: ₹6,165 – Consider booking 5% 🟢 Buy Zone: ₹3,609 for long-term investors 📉 Consolidation with steady breakout attempts—ideal for staggered entry

✅ Conclusion: Long-Term Risk–Reward

📢 Disclosure

This report is for educational purposes only and not investment advice.

Year
Stores
Revenue (₹ Cr)
Net Profit (₹ Cr)
FY2012
57
2,209
61
FY2016
110+
8,588
321
FY2020
214
24,870
1,301
FY2023
324
42,839
2,373
FY2025
415
59,358
2,707
FY26E
473
69,152
3,250
📌 7X growth in 7 years (Chart below)
📍 Revenue CAGR (FY16–FY25): ~22%
📍 Profit CAGR (FY16–FY25): ~26%

Year
NPM %
FY2012
2.8%
FY2016
3.7%
FY2020
5.2%
FY2023
5.5%
FY2025
4.6%
FY26E
4.7%

🟢 Margins remain stable, indicating pricing power and operational efficiency despite cost inflation.

Metric
Q1 FY26
Q1 FY25
YoY Growth
Revenue (₹ Cr)
16,360
14,069
16%
Profit (₹ Cr)
773
774
Flat (0%)
EPS (₹)
11.88
11.89
Flat
Margin (%)
4.7%
5.5%
↓ -0.8%
Like-to-like Sales
7.10%
9.10%
↓
Stores
424
371
↑ 53 stores
⚠️ Margin dip due to cost increase and flat EPS – a short-term blip.

Major Cost Head
Value (₹ Cr)
Share (%)
Growth YoY
Stock-in-trade
13,732
90%
15%
Employee Cost
347
2%
30%
D&A
232
2%
20%
Other Expenses
859
6%
22%
Finance Cost
29
0%
81%

Year
Low PE
High PE
FY2018
50
110
FY2020
59
124
FY2022
116
256
FY2024
86
117
FY25-TTM
90
110

Year
Low PBV
High PBV
FY2018
8
19
FY2020
7
15
FY2022
13
28
FY2025
10
17
FY26-TTM
11
13

📌 Premium valuations reflect market trust in DMart's long-term visibility and execution.

Year
Stores
Revenue (₹ Cr)
Net Profit (₹ Cr)
EPS
Margin
FY26E
473
69,152
3,250
49.6
4.7%
FY30E
693
1,43,394
6,621
101
4.6%
FY35E
1,116
2,88,416
13,318
203
4.6%

Year
EPS
Book Value
Low (₹)
Fair (₹)
High (₹)
FY26E
49.6
₹379
₹3,470
₹4,214
₹4,957
FY30E
101
₹785
₹7,069
₹8,584
₹10,099
FY35E
203
₹1,580
₹14,219
₹17,266
₹20,313

Metric
Allocation %
EPS-Based Weight
1.81%
Book Value-Based
2.20%
PEG Ratio-Based
0.81%
Actual Weight
1.61%

🔍 Suitable as a core holding in a quality, consumer-centric long-term portfolio.

✅ Return: 7X in last 7 years
🎯 Target FY26: ₹6,165 – Consider booking 5%
🟢 Buy Zone: ₹3,609 for long-term investors
📉 Consolidation with steady breakout attempts—ideal for staggered entry