Motilal Oswal sees 18% upside in DMart despite flat metro growth, Rs 4,800 target
DMart's Q1FY27 revenue rose 15% to Rs 18,794 crore and net profit climbed 11.3% YoY to Rs 860.6 crore, but LFL growth cooled to 5.5% as quick-commerce pressures metro demand. Motilal Oswal keeps Buy, citing 85-90 annual store additions through FY27-29 and DMart Ready's rationalisation to 11 cities.
What happened
DMart's Q1FY27 revenue grew 15% with LFL decelerating to 5.5% and flat metro growth amid quick-commerce competition. Motilal Oswal maintains Buy, raising target
Key facts
- 18% upside
- target Rs 4,800
- revenue growth 15%
- LFL growth 5.5%
- net profit Rs 860.6 crore
- profit up 11.3% YoY
- revenue Rs 18,794 crore
- EBITDA Rs 1,499 crore
- EBITDA margin 7.97%
- DMart Ready exited 7 cities, now in 11
- 85-90 annual store additions FY27-29
Why this matters
Decelerating metro LFL and DMart Ready's retreat to 11 cities highlight where partnerships or last-mile acquisitions could shore up the quick-commerce gap.
What to watch
- Q2FY27 LFL print (below 5% = bearish confirmation)
- Gross/EBITDA margin trend amid price competition
- Actual store-addition pace vs 85-90 annual target
- DMart Ready loss narrowing after 11-city rationalisation
- Metro same-store footfall and basket-size data
- Sell-side peers refresh models on LFL trajectory vs store-count math
- DMart accelerates value-pricing and private-label push to defend metro baskets
- Watch for competitor commentary (Reliance Retail, Blinkit) on q-commerce grocery share
- Management guidance on DMart Ready burn-rate and city footprint