DMart Shares Dip 1% After Q2 Results; Brokerages Cite Margin Pressure, Sluggish Online Growth

Shares of Avenue Supermarts Ltd (DMart) slipped 1% to ₹4,275 in early trade on Monday following mixed reactions from analysts to the company’s July–September quarter earnings. Despite stabilising gross margins, brokerages flagged mounting operating costs, slower same-store sales, and the company’s decision to scale back its online arm, DMart Ready.

As of 9:16 am, DMart shares were trading at ₹4,275 on the NSE, down from the previous close of ₹4,320.40.

DMart Q2 FY26 Earnings Snapshot

Avenue Supermarts posted a 3.8% year-on-year rise in consolidated net profit to ₹684.85 crore for Q2 FY26, as higher employee and finance costs put pressure on profitability.

Revenue from operations: ₹16,676 crore, up 15.4% YoY

EBITDA margin: 7.28%, compared to 7.57% in Q2 FY25

Store additions: 8 new outlets, taking the total to 432 stores

Like-for-like growth (stores >2 years): 6.8%

Meanwhile, the retailer’s e-commerce venture DMart Ready exited five cities, reducing its presence to 19 markets across India.

Brokerage Reactions: Mixed Sentiment

Brokerages offered varied takes on DMart’s Q2 performance:

HSBC: Maintained a Reduce rating with a target price of ₹3,700, citing elevated costs and moderated same-store growth. The brokerage noted that while margin decline has stabilised, competition and operating expenses remain key headwinds.

Morgan Stanley: Retained an Equal-weight stance with a target price of ₹4,552, observing 15% growth in revenue, 11% in EBITDA, and 4% in PAT — all below estimates.

CLSA: Maintained a High Conviction Outperform rating with a target of ₹6,300, highlighting consistent store expansion and healthy same-store performance despite cost pressures from newer stores and staffing.

Outlook

While CLSA remains optimistic about DMart’s long-term retail expansion, both HSBC and Morgan Stanley have advised caution amid near-term cost challenges and slower online business traction.