Avenue Supermarts Ltd, which owns and operates DMart stores, reported a 17.5 percent increase in operating income at Rs 15,565.23 crore in the third quarter ended December 31, 2024. At the same time last year, the company reported revenue of Rs. 13,247.33. The total number of stores as of December 2024 stands at 387.
The quarterly earnings are subject to a limited review by the company’s statutory auditors, he said.
So, should you buy, hold or sell DMart shares after its Q3 business update?
Morgan Stanley on the counter maintained its previous ‘underweight’ call on a target of Rs 3,702, implying a potential gain of just over 2 percent from the previous close of Rs 3,615 per share. Maintaining the rating, the brokerage said the weak growth trends in the retail company continued. Standalone 3Q revenue of Rs 15,570 crore was up 17.5 percent YoY, about 1 percent more than expected. Furtner added that top-line growth was led by an average 12 percent increase in store count.
Same-store sales growth (implied) at the retailer during that period came in at about 5.5 percent compared to an average of just over 4 percent. The growth trend remains below the top line growth algorithm of 20 percent for the business, the brokerage added.
Similarly, Citi has also maintained its ‘sell’ rating on the retail company with a price target of Rs 3,500, indicating a potential downside of more than 3 percent.
Macquarie, on the other hand, has maintained its previous ‘underperform’ rating and has suggested a target of Rs 3,700 – meaning it could be over 2 per cent. The brokerage noted that normal acquisition of merchandise/assets helped in the 3Q sales print. Additionally, it revealed that competitive winds from fast-moving commerce (QC) are weighing on the company’s growth.
Sales growth in the period under review returned to 1QFY25 levels. 10 store additions match our rating, added.
The brokerage added that DMart is targeting 3Q standalone sales of Rs 15570 crore, with a total store count of 387. Typically, 3Q sees sequential pickups at higher margins given a better product mix, it said.
