Avenue Supermarts share price slips over 4% after Q1 results. Should you buy, sell or hold DMart shares?

Avenue Supermarts share price plunged over 4% in early trade on Monday, after the DMart retail chain operator reported its fiscal first quarter results. Avenue Supermarts shares fell as much as 4.23% to ₹3,910.00 apiece on the BSE.

Avenue Supermarts reported an 11.3% year-on-year rise in consolidated net profit to ₹860.6 crore in the quarter ended June 2026, while the company’s revenue grew 14.9% YoY to ₹18,794 crore.

The company’s revenue from sales per sq. ft. in Q1FY27 declined 2.37% YoY at ₹8,571 crore.

The company’s like-for-like (LFL) growth decelerated to 5.5% as against 10.8% in the March quarter, while its management indicated that revenue growth for older stores in large metros was flat, while non-metro stores’ revenue grew well.

At the operating level, EBITDA increased 15.4% to ₹1,499 crore, while EBITDA margin improved marginally to 7.97% from 7.94% in the year-ago period.

Devanshu Bansal, Research Analyst at Emkay Global Financial Services said that Avenue Supermarts reported lacklustre Q1 results, with primary disappointments stemming from slower growth in bill size and likely slower ramp-up in new store additions. After a bump in Q4, LFL growth normalized to 5.5% in Q1FY27, largely led by maturing of new stores, with older stores in large metros seeing a flat growth trend.

The company’s board also approved issuance of ₹1,000 crore non-convertible debentures, highlighting the need for constant external capital for growth, he noted.

Emkay Global has maintained a ‘Sell’ rating on DMart shares, while retaining its target price of ₹3,700, based on 54x June 2028 estimated EPS.

The brokerage cited concerns over slower total addressable market (TAM) expansion, the erosion of DMart’s value and assortment advantage amid rising quick commerce competition, deteriorating return on invested capital (RoIC), and its stretched valuation of around 70x one-year forward price-to-earnings (P/E).

Nuvama Institutional Equities has revised its FY27 revenue and PAT estimates downward by 0.5% and 1.8%, respectively, while trimming its FY28 revenue and PAT forecasts by 0.3% and 3.1%. The brokerage also reduced its valuation multiple to 60x Q1FY29 estimated PAT from 70x, while maintaining a ‘Hold’ rating on the stock.

Consequently, the brokerage firm cut Avenue Supermarts share price target to 4,383 apiece from ₹4,974 earlier.

At 9:30 AM, DMart share price was trading 2.48% lower at ₹3,981.70 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Ankit Gohel is the Deputy Chief Content Producer at Livemint, specialising in financial markets, macroeconomics, and regulatory developments. With a strong focus on equity markets, primary issuances, and policy-driven market movements, he brings clarity to complex financial developments for investors and market participants. <br><br> With nine years of experience in business and financial journalism, Ankit’s approach is rooted in the belief that market reporting should go beyond headlines — connecting data, policy, and ground realities to deliver actionable insights. His work consistently bridges the gap between institutional analysis and investor understanding. <br><br> Ankit has spent three years at Livemint, where he currently helps drive market coverage, editorial strategy, and high-impact financial stories. Prior to this, he worked with leading business news networks such as CNBC-TV18, ET Now, TickerPlant News Service where he built deep expertise in stock market analysis, macroeconomic trends, primary markets, and coverage of key regulators including the RBI and SEBI. <br><br> Over the years, he has covered market cycles across bull and bear phases, IPO booms, liquidity shocks, and major policy shifts that reshaped investor sentiment. He has interviewed fund managers, corporate leaders, an...