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DMart adds 15 stores in 2Q to reach 518; Motilal Oswal stays Neutral, trims target to Rs 3,925 after profit miss

Our read

Avenue Supermarts will more likely than not keep growing revenue near current rates while margins stay flat, so the valuation debate turns on profit delivery rather than store count.

For operators

DMart added 15 stores in the quarter to reach 518 and posted 9.5% like-for-like growth, so rival value retailers face a competitor that keeps expanding while demand at existing stores holds up.

Watch

Like-for-like growth above the 9.5% reported for 2QFY27, at the 3QFY27 results, would mean store demand is holding and the profit miss was cost-led, not demand-led.

Ask next

How do DMart's results compare with its rivals?

The report

DMart added 15 stores in 2Q, taking its total to 518, while revenue growth accelerated to ~18% YoY. Motilal Oswal kept Neutral, cutting target to Rs 3,925 from Rs 4,000 as EBITDA and PAT missed estimates by 3% and 7%.

Newer report adds to this story , : Q2 EBITDA margin was 7.3%; shares fell as much as 4% on 12 October.

Read next

  1. DMart grows revenue 18.4% but value retail stocks slide as V2 Retail cuts same-store sales guidance, , Mint
  2. Trent jumps 12.64% to Rs 2,906 on 23% Q2 standalone revenue growth as Avenue Supermarts hits a 52-week low, , Moneycontrol
  • Flipkart: IPO may slip 1-2 years
  • McCain Foods: 450+ employees

Reported figures

From the report. Source details below

2Q like-for-like growth: 9.5%

What to watch next

  • EBITDA margin against the 1HFY27 level of 7.8% in the next results
  • Store additions in 3Q against the 15 added in 2Q
  • Other brokers' target changes after Motilal Oswal's ₹3,925
  • Rival pricing and discounting moves in DMart's key categories

The counter-case

The case against this reading — not reported by the source.

The 'down' delta is mostly noise. A cut from Rs 4,000 to Rs 3,925 is under 2%, and the rating stays Neutral, so Motilal Oswal's stance has not changed. The more material point is the quality of the quarter. EBITDA missed by 3% and PAT by 7%, even though revenue grew ~18% and like-for-like growth was 9.5%. That suggests growth is not converting to profit, which points to margin pressure from mix, pricing or cost investment. A 1HFY27 EBITDA margin of 7.8% may be sliding, and the signal gives no comparison to show whether it is. The 15 store additions to 518 are a routine expansion headline and not a positive surprise. Valuing the stock on Dec 2028E also means most of the target rests on distant earnings, so a small cut after a miss may understate how fragile that forecast is. The headline mixes a positive operating story with a negative earnings story, and that blurs what the signal actually is.

The source

Source Read the source at Moneycontrol Filed

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