DMart Q1 disappoints: flat metro growth, slow store adds spark de-rating risk with targets from Rs 3,700
Avenue Supermarts' Q1 saw LFL growth at just 5.5% and only 3 new stores added (total 503). Weak DMart Ready performance and PAT growth of 13% underwhelmed analysts. High valuation poses de-rating risk, with targets ranging from Rs 3,700 (Sell) to Rs 4,800 (Buy).
What happened
DMart's Q1 results disappointed analysts with flat metro LFL growth, slow store additions (3 added, total 503), and weak DMart Ready performance. High valuation
Key facts
- Target Rs 3,700
- Target Rs 4,700
- Target Rs 4,383
- Target Rs 4,800
- LFL 5.5%
- General Merchandise & Apparel up 19%
- PAT growth 13%
- 503 stores
- 3 stores added
- NCD raise Rs 1,100 crore
- Bills per store -4.4% YoY
- losses Rs 75.30 crore
Why this matters
Sluggish DMart Ready and decelerating footprint expansion open a window to evaluate last-mile logistics or e-grocery tie-ups to reignite omnichannel growth.
What to watch
- Q2 store-addition count and LFL recovery vs 5.5% base
- DMart Ready GMV/loss trajectory and quick-commerce competitive data
- Gross margin and PAT growth trend for continued mid-teens deceleration
- FII/DII holding changes and block deals
- Metro vs non-metro same-store growth divergence
- Sell-side revises FY25 EPS and target ranges; more Sell/Hold initiations likely
- Management commentary on store-expansion cadence and DMart Ready strategy scrutinized
- Peers (Trent, Reliance Retail read-through) benchmarked on quick-commerce exposure
- Retail investors watch for support near Rs 3,700 psychological/technical floor