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DMart Stock Dives Despite Sales Surge
4 Jul
Summary
- DMart's Q1 revenue rose 15.1% to Rs 18,343.5 crore.
- Analysts expected higher growth, impacting market sentiment.
- Expansion pace slowed, and store productivity declined.
Avenue Supermarts, operating under the DMart brand, reported a standalone revenue of Rs 18,343.5 crore for the quarter ended June 30, 2026. This represents a 15.1% increase from the Rs 15,932.1 crore recorded in the same period last year. The company also expanded its footprint by adding three new stores, bringing its total to 503.
Despite healthy revenue growth, the stock saw a significant decline as market expectations were not met. Brokerage firm Motilal Oswal highlighted that the 15% year-on-year revenue growth was below their earlier estimates. Concerns also emerged regarding the slower pace of expansion, with only three new stores opened in the June quarter, a contrast to the 58 opened in the previous quarter.
Weakening productivity metrics, including a nearly 4% year-on-year decline in annualized revenue per store to approximately Rs 146 crore, have also been noted. Analysts suggest that newer stores are taking longer to achieve optimal sales levels. The board is scheduled to meet on July 11 to consider a fund-raising plan through debt securities.
Motilal Oswal maintains a 'Buy' rating on the stock, viewing the current correction as a potential opportunity. Investors will be closely monitoring upcoming earnings reports to assess acceleration in revenue growth, improvements in store productivity, and the pace of expansion.
