DMart Share Price Soars 14% in Early Trade: Is It Time to Buy?

The scrip of Avenue Supermarts Ltd which Owns the DMart Subsidiary went up over 14% in Today’s early trading session. This followed the announcement of a better than expected business performance for the three months to December ending fiscal year 2024-2025.

Earlier, the stock had ended at ₹3,617.75, The stock which opened at ₹3,620.40 reached a new high of ₹4,165 against the previous high of ₹3,676 from the previous trading session. It also closed more than 8 percent up, though still much lower than its 52-week high of ₹5,484.00 acquired on September 24, 2024. As of the time of this writing, the Market capitalization of DMart is ₹2,66,800.56 crores and the stocks too currently trade at ₹4,134 up by 14.27%.

On standalone basis, DMart has posted ₹15,565.23 crore revenue from operation in the quarter, up 17.5 % YoY from ₹13,247 crore a year ago December quarter. At the same time, the retail stores of the company also grew to 387 by December 31, 2024.

By 9:, by 20 AM the stock price had gone up by 10%, to $3,972.2 on the National Stock Exchange of India Ltd.

Brokerage Views
The strong revenue growth resulted in brokerage firms’ reactions from conservative to bulls for the stock.

Morgan Stanley remained pessimistic about the company’s prospects while pointing out that its sales growth rate was lower than the store chain’s previous 20% increase in nominal terms. But it said that while Q3 was standalone, the company had made 1% more than its estimates of the revenue. Morgan Stanley credited the improvement to the store-opening expansion, which the firm said rose 12%; SSSG was about 5.5%, above the 4% it forecasted. But it maintained a target of ₹3,702 on the share, which gave a maximum upside potential of 4%.

Macquarie recently expressed its concern about competitive threats originating from the emerging quick commerce segment, which the investment bank says is impacting DMart’s scale-up. The brokerage further stated that Q3 normally enjoys the upwards revision of gross margins on the back of better product mix. While 10 stores were opened up during the quarter which fell right in line with expectations, Macquarie never fully changed its outlook.

On the other hand, CLSA a brokerage house based in Hong Kong gave optimism outlook on Avenue Supermarts’ performance. It has an “outperform’’ rating and has set a price target of ₹5,360 for the share that is 50% higher than the last closing price. While CLSA found that DMart’s standalone revenue news post the quarter-end exceeded expectations, the firm noted that the company’s focus on private labels. These in-house brands are regarded as another kind of competitive weapon that contributes to such factors as profitability and outsourcing counteraction.

During the quarter ended September 30, 2015, our net profit stood at ₹659.6 crore, which is 5.8% more than ₹623.6 crore profit registered in the corresponding quarter of the previous year. Total income for the quarter was at ₹14,444.5 crore, up by 14.4 per cent from the corresponding period of the earlier fiscal at ₹12,624.4 crore.

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