DMart Stock Plummets 4% as Q1 Update Signals Slower Growth, Brokers Maintain Cautious Stance

DMart Stock Plummets 4% as Q1 Update Signals Slower Growth, Brokers Maintain Cautious Stance​

Avenue Supermarts (DMart), the operator of the rapidly expanding retail chain, saw its shares decline over 4 percent in Friday's morning trade. The slump came after the company released a business update for the April-June quarter that was softer than anticipated by the market. Brokerages like Goldman Sachs and Macquarie reaffirmed their negative outlook on the stock following the Q1 results.

DMart’s shares, trading at Rs 4,016.50, experienced a notable decline in morning trading despite the company's overall performance. The company maintains a substantial market capitalization of Rs 2.62 lakh crore. On a positive note, the stock remains up approximately 8 percent year-to-date, significantly outperforming the Nifty 50, which has seen declines of around 7 percent in the same period.

Q1 Performance Details and Store Expansion​

For the quarter ended June 30, 2026, Avenue Supermarts reported a standalone revenue of Rs 18,343.49 crore. This figure represents a solid increase of 15.1 percent compared to the revenue of Rs 15,932.12 crore recorded in the corresponding period last year.

In terms of physical expansion, Avenue Supermarts added three new stores during the quarter. This addition brings the retailer's total store count to 503. The company continued its network growth despite the stock market reaction to the update.

Brokerage Reactions and Growth Concerns​

The disappointing sales performance signaled by the June quarter update led to cautious commentary from major investment houses. Goldman Sachs maintained a 'Sell' rating on Avenue Supermarts, setting a target price of Rs 4,000. The brokerage noted that revenue growth had moderated in the June quarter despite continued store additions and high FMCG inflation.

Macquarie also retained an 'Underperform' rating on the retailer. Macquarie set a target price at Rs 3,100, suggesting approximately 26 percent downside from Thursday's closing price. The brokerage found the June quarter sales performance disappointing, noting that both revenue growth and store additions fell short of its expectations.

Analysts Pinpoint Slower Expansion as Key Concern​

The market reaction was primarily driven by the fact that the June quarter update indicated a slower pace of expansion and sales growth than some analysts had previously anticipated. This concern persists even as the retailer continues to actively expand its physical network.

Goldman Sachs identified several potential upside risks to their cautious viewpoint. These include a quicker-than-expected rate of store expansion, successful scaling of DMart Ready, a slower shift towards online grocery shopping penetration, and a stronger recovery in discretionary spending among middle-income consumers.