DMart Q4 FY26 Results: Stock Drops 4%, Targets Split

Market reacts sharply to DMart earnings

Avenue Supermarts, the company behind the DMart retail chain, saw its shares fall over 4% on May 4 after announcing quarterly results. The decline came despite year-on-year profit growth, as investors focused on margins and broader operating trends. The stock opened weak and extended losses in early trade. Around 9:55 am, the shares were down about 3.5% (₹159.15) at ₹4,431.55. During the session, the stock hit an intraday low of ₹4,395, around 4.3% lower than the previous close of ₹4,590.70. The move increased near-term volatility in a stock that is closely tracked as a proxy for organised grocery and value retail.

Key Q4 FY26 numbers: profit, revenue, EBITDA

In its regulatory filing for the March quarter (Q4 FY26), Avenue Supermarts reported consolidated net profit of ₹656.42 crore, up 19.17% year-on-year from ₹550.79 crore. Revenue from operations rose 18.9% to ₹17,683.86 crore from ₹14,871.86 crore in Q4 FY25. Total income, including other income, was ₹17,702.03 crore, up 18.83% year-on-year. At an operating level, EBITDA stood at ₹1,211 crore, a 26.8% rise from ₹955 crore a year earlier. EBITDA margin expanded to 6.8% from 6.4% in Q4 FY25. The company also reported that PAT margin was 3.7% in Q4 FY26, unchanged from the year-ago quarter.

What investors flagged: costs, expansion, and competition

Even with double-digit growth in profit and revenue, the stock reaction was negative as investors weighed costs and margin trajectory. The reports around the results pointed to higher operating costs and expansion expenses. Competitive pressure in the retail sector was also cited as a factor affecting profitability and expectations. Total expenses in the March quarter rose 18.5% year-on-year to ₹16,797.86 crore. Some market commentary framed the outcome as a “miss” versus street expectations on profit, despite stable revenue growth. The gap between reported growth and market expectations appeared to drive the immediate selling pressure. The result was a sharp move in the share price rather than a gradual repricing.

Stock price action on May 4: levels to note

The day’s trade showed a clear risk-off response to the earnings print. From the previous close of ₹4,590.70, the stock slipped to an intraday low of ₹4,395. At 9:55 am, it traded near ₹4,431.55, down about 3.5% on the day. The market’s focus remained on operating metrics and forward expectations rather than the headline profit growth alone. The fall also brought attention to how quickly sentiment can shift around a high-ownership, widely tracked consumer stock. In the short term, such moves tend to amplify sensitivity to brokerage commentary and management execution cues.

Damani’s wealth impact: ₹9,300 crore erosion in a session

The share-price decline also hit the notional value of promoter holdings. According to the provided reports, billionaire investor and DMart founder Radhakishan Damani’s wealth fell by around ₹9,300 crore in a single trading session, linked to the stock’s drop. Separate market reporting in the provided material also highlighted how promoter wealth erosion is often a function of immediate sentiment rather than long-term business viability. As of the March quarter, promoters held a 74.65% stake in DMart, underscoring why even a single-session move can materially affect promoter wealth estimates. Another estimate in the provided text linked a 4% fall to an erosion of about ₹8,100 crore in the notional value of promoter holdings, reflecting differences in timing and price points used. What remained consistent across reports was the direct linkage between stock price movement and promoter wealth change.

Brokerages split: targets range ₹3,700 to ₹5,200

Post-results, multiple brokerages issued divergent views, reflecting mixed sentiment on near-term performance and valuation comfort. Nuvama retained a HOLD and raised its target price to ₹4,975 from ₹4,351, implying upside of over 13% from the then current level. Goldman Sachs maintained a Sell and raised its target to ₹4,000 from ₹3,730, implying about 9.5% downside. Emkay maintained a Sell with a ₹3,700 target, implying around 19% downside. Morgan Stanley kept an Overweight stance with a target of ₹5,188. Motilal Oswal maintained a Buy and raised its target to ₹5,200 from ₹5,000, and it also raised FY27-28 PAT estimates by around 3-7%.

FY26 snapshot and what it says about the year

For the full year FY26, Avenue Supermarts reported profit of ₹2,969.86 crore, up 9.7% year-on-year. Total consolidated income for FY26 rose 15.8% to ₹68,894.84 crore. The FY26 numbers add context to the quarter’s reaction, showing steady scale-up in sales and income even as investors debate the cost of growth. One brokerage note cited in the provided material pointed to negative free cash flow of nearly ₹4,000 crore in FY26, attributed to aggressive expansion. The same note added that allied costs are expected to limit PAT growth to about 16% in FY27E. In contrast, Motilal Oswal projected a 19/20/19% CAGR in revenue, EBITDA, and PAT over FY26-28, highlighting the range of assumptions embedded in current targets.

Business footprint and sector backdrop

DMart retails basic home and personal products across multiple Indian markets. The company operates across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan, as per the provided filing-based report. The broader narrative in the provided material remained that organised retail expansion continues to be a long-term tailwind, even if quarterly margin swings cause near-term volatility. At the same time, competitive intensity and the cost of store additions remain key variables that can influence quarterly outcomes. These factors help explain why a quarter with profit growth can still trigger a sharp correction in the stock.

What to watch after the Q4 reaction

The immediate focus for investors is likely to remain on margins, operating costs, and the pace of expansion spend. Market participants will also track how management balances growth investments with profitability and cash generation, given the reference to negative free cash flow in FY26. Brokerage targets between ₹3,700 and ₹5,200 indicate that valuation comfort and confidence in forward execution differ meaningfully across analysts. For shareholders, the reaction underlines that quarterly outcomes are being judged not only on growth but also on the quality and sustainability of that growth. Future updates and subsequent quarterly results will provide clearer evidence on whether margin trends stabilise.

Conclusion

Avenue Supermarts posted 19% year-on-year profit growth in Q4 FY26 and nearly 19% revenue growth, but DMart shares still fell over 4% as investors assessed costs and margin trends. The stock move reduced Radhakishan Damani’s notional wealth by about ₹9,300 crore in a single session, reflecting the sensitivity of promoter wealth to market pricing. Brokerages remain split, with targets ranging from ₹3,700 to ₹5,200. The next set of operating and financial updates will be important for gauging whether the post-results volatility fades or persists alongside margin and cash-flow concerns.