Broker retains Sell on DMart, sets ₹3,700 target as quick-commerce pressure persists

Avenue Supermarts’ target price is marginally below its ₹3,711.95 CMP. The broker sees 6-7% basket inflation and possible GST savings supporting bills, but flags discretionary-demand risk and intensifying competition from quick-commerce platforms.

— Source publishedWed, 16 Sept, 2026, 18:58 IST·First seen Wed, 16 Sept, 2026, 19:07 IST·Source The Hindu BusinessLine

What happened

Avenue Supermarts (DMart) · Broker maintains Sell on DMart with ₹3,700 target. Basket inflation may lift bills, supplemented by GST benefits, but discretionary

Key facts

  • Target price: ₹3,700
  • CMP: ₹3,711.95
  • Monthly basket bill inflation: 6-7%
  • Category price increases: 8-14%
  • Personal care prices: down around 3% year-on-year
  • Potential GST-related net bill value benefit: 2-3%
  • DMart stock decline: about 20% over 12 months
  • DMart category TAM expansion: 50% of India retail TAM
  • Target valuation: 55x Sep-28E EPS

Why this matters

The widening quick-commerce threat underscores the strategic value of faster fulfillment, digital capabilities, and partnerships or acquisitions that can defend DMart’s convenience proposition.

What to watch

  • Quarterly same-store sales growth, customer footfall and average basket-value trends.
  • Growth and margin trajectory in general merchandise, apparel and other discretionary categories.
  • Gross-margin movement, promotional intensity and private-label mix.
  • Quick-commerce price gaps, SKU breadth, delivery coverage and order-frequency growth in DMart catchments.
  • New-store additions, store maturity curves and sales-per-square-foot trends.
  • Management commentary on GST pass-through, consumer purchasing power and urban demand.
  • Broker earnings revisions or target-price cuts following quarterly results.
  • Increase value-pack, private-label and essential-category visibility to defend recurring grocery baskets.
  • Use localized pricing and sharper promotions in quick-commerce-heavy urban micro-markets rather than broad-based discounting.
  • Expand omnichannel or rapid-pickup capabilities selectively where store density can support economics.
  • Moderate new-store and discretionary-capex pacing if mature-store sales growth weakens.
  • Rebalance assortment toward staples and high-velocity replenishment categories while protecting differentiated general-merchandise margins.