The profit compares with Rs 724 crore in the same period last year. Revenue from operations grew 13% YoY to Rs 18,101 crore, up from Rs 15,972 crore in Q3 FY2025.
The company’s profitability improved, with PAT margins expanding to 4.7% from 4.5% the previous year. EBITDA stood at Rs 1,463 crore, up from Rs 1,217 crore in Q3FY25, and the EBITDA margin improved to 8.1%, compared to 7.6% in the same period last year.
During the quarter, DMart added 10 new stores, taking the total count to 422. However, a higher thrust on rental properties contributed to rising lease and depreciation costs.
DMart Ready, the e-commerce vertical, saw its growth slow to 20% (from 25% in Q3 FY25), as its presence dropped from 25 cities to 19 cities year-over-year.
On the profitability side, gross margins expanded to 14.6% (up 50 bps YoY), supported by reduced promotional intensity in FMCG and GST cuts. Wage inflation and a mismatch in skilled workforce supply remained a cost pressure, but EBITDA rose 20% YoY, aided by strong cost control.Here’s what investors should do now:
Nuvama retains ‘Hold’ rating; Target price at Rs 4,351
The brokerage firm Nuvama Institutional Equities has maintained a ‘Hold’ rating on Avenue Supermarts stock, with a target price of Rs 4,351, down from Rs 4,580 earlier.
The brokerage acknowledged the improvement in gross margins and EBITDA, which was supported by promotional rationalisation and cost efficiencies. However, it flagged concerns over slowing top-line growth, particularly in the standalone business, along with widening losses at subsidiaries such as DMart Ready.
Nuvama also noted that the reduction in DMart Ready’s city presence from 25 to 19 reflects a more cautious stance on scaling the company’s e-commerce operations.
It has also been noted that revenue per square foot remains flat, and same-store sales growth of 5.6% is only moderately encouraging. Therefore, while profitability trends are encouraging, the muted growth trajectory justifies a cautious stance.
Motilal Oswal reiterates ‘buy’ rating with Rs 4,600 target price
Motilal Oswal reiterated its ‘buy’ rating on the stock, revising its target price to Rs 4,600, up from earlier Rs 4,300.
“We believe DMART’s value-focused model and superior store economics would ensure its competitiveness and customer relevance over the longer term, despite QC’s convenience-focused model,” said the domestic brokerage firm.
Motilal Oswal raised its FY26-28 EBITDA and PAT by ~3-5%, primarily driven by higher GM. They built in a CAGR of 16%/16%/12% in DMART’s consolidated revenue/EBITDA/PAT over FY25-28E, driven by a 15% CAGR in store additions and ~6% LFL growth.
JM Financial maintains ‘reduce’ with target price of Rs 3,950
JM Financial maintained a’reduce’ rating on DMart and reduced its target price to Rs 3,950, from an earlier Rs 4,100.
Given the strong operational beat in 3Q, the brokerage firm’s FY26 EPS estimates have gone up by 3%; however, their FY27 estimates are largely unchanged and FY28 estimates are cut by 3%, largely on account of (1) a cut in store opening estimates on slower-than-expected ramp-up in store openings and (2) a cut in SSSG estimates.
“We also cut our target multiple to 62x (from 65x earlier) on deceleration in revenue growth momentum,” the brokerage added.
Jefferies retains ‘hold’ rating, sets Rs 4,050 TP
Jefferies has maintained its ‘Hold’ rating on the stock, with a target price of Rs 4,050.
The global brokerage noted that DMart continued to see moderation in revenue growth, with like-for-like (LFL) sales at 5.6%, while the portfolio mix remained broadly stable. Despite this, EBITDA margins expanded to a multi-quarter high, driving an earnings surprise as EBITDA grew 20% year-on-year.
Store additions remained steady, with most expansion expected in Q4. The CEO transition is scheduled for the March quarter, and management anticipates minimal impact from the implementation of the new labour codes.
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