DMART

Q2 Results: Brokerage trims FY26–27 revenue and profit projections; maintains ‘Hold’ with revised target price

Nuvama Wealth Management has revised its financial projections for Avenue Supermarts Ltd the parent company of DMart cutting revenue estimates for FY26 and FY27 by 0.8% and 1.7%, respectively, and reducing profit forecasts by 6.6% and 3.6%. Despite the downward revisions, the brokerage has maintained its ‘Hold’ rating on the stock and raised the target price to ₹4,580 per share from ₹4,544, implying a potential upside of 6% from Friday’s closing price. According to the report, the widening losses in subsidiaries were primarily driven by a higher share of delivery-based sales compared to in-store pickups. DMart added 10 new fulfilment centres in existing markets and continued to strengthen its footprint across major metro cities during the quarter. The brokerage noted that DMart Ready’s growth slowed to 16% year-on-year, lower than the previous 20% trend, while the company withdrew operations from five cities during Q2. Avenue Supermarts Q2 Highlights (Consolidated, YoY): Revenue: ₹16,676.30 crore (↑15.5% YoY) vs ₹14,444.50 crore EBITDA: ₹1,213.65 crore (↑11.0% YoY) vs ₹1,093.72 crore EBITDA Margin: 7.3% vs 7.6% Net Profit: ₹685.01 crore (↑4% YoY) vs ₹659.58 crore During the July–September quarter, the operating margin remained largely stable, with the slowest margin compression in four quarters. However, Nuvama expects margin challenges to continue amid heightened competition in the FMCG segment and a shift in product mix. The company’s operating expenses also rose, driven by increased wage costs for entry-level roles and a mismatch between demand and supply for skilled workers. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.