DMart share price falls after Q4 FY26: targets split

Stock extends losses after results

Shares of Avenue Supermarts Ltd, which operates the DMart retail chain, stayed under pressure after the company announced its quarterly numbers over the weekend. The stock extended its losing streak for a second consecutive session on Tuesday, even as the headline profit and revenue rose year-on-year. In afternoon trade on the BSE, the share price was down 0.47% at ₹4,353.55, compared with the previous close of ₹4,374.15.

The negative reaction followed a sharp move a day earlier. On Monday (May 4), the stock fell over 4% after opening weak and extending losses in early trade. Around 9:55 am, it was down about 3.5% at ₹4,431.55, and it touched an intraday low of ₹4,395. The intraday fall was roughly 4.3% from the previous close of ₹4,590.70.

What the company reported for Q4 FY26

Avenue Supermarts reported a year-on-year increase in consolidated net profit for the March quarter (Q4 FY26). Consolidated net profit came in at ₹656.42 crore, up from ₹550.79 crore in the same quarter last year. Revenue from operations rose to ₹17,683.86 crore from ₹14,871.86 crore a year earlier.

Another report pegged Q4 net profit at ₹656.59 crore versus ₹550.9 crore, with revenue also reported at ₹17,683.86 crore for the quarter. While the difference in profit is marginal, both sets of figures point to broadly similar growth for the period.

Why the market reaction was still negative

Despite top-line and bottom-line growth, brokerages highlighted that investors were weighing broader operating metrics and cost trends. One view was that higher rentals, depreciation, and delivery-led losses continued to weigh on margins even as gross margin improved.

Some analysts also pointed to changes in the balance sheet due to faster store additions. JM Financial said a store expansion spree flipped the company from net cash to net debt, and it linked lower other income and higher interest costs to increased borrowing for expansion.

Brokerages split: buy, hold, reduce and sell

Post-results, recommendations varied widely, reflecting a split between optimism on store-led growth and caution on profitability pressures and competition.

Axis Direct maintained a Buy rating and raised its target price to ₹5,270 per share, citing focus areas such as store productivity, profitability improvement, and recovery in the General Merchandise and Apparel segment.

PL Capital retained a Hold rating with a target price of ₹4,410. It said EBITDA and PAT were ahead of its estimates by 3.6% and 5.4% respectively, led by a lower cost of retail, but it warned that operating metrics remained weak.

JM Financial reiterated a Reduce call with an unchanged target price of ₹4,500. It noted a robust quarter operationally but said PAT growth missed expectations due to 22% year-on-year lower other income and higher interest cost, which it attributed to debt raised for faster store expansion.

Global houses and domestic brokers: target band widens

Several brokerages published targets spanning a wide range, from ₹3,700 on the bearish end to around ₹5,200 on the bullish end.

Nuvama retained a Hold rating and raised its target to ₹4,975 from ₹4,351, noting margin pressures from rentals, depreciation and delivery-related losses despite some gross margin improvement. Goldman Sachs maintained a Sell rating and raised its target to ₹4,000 from ₹3,730. Emkay maintained a Sell rating with a target of ₹3,700, citing concerns such as a fading value and assortment edge versus quick commerce, deteriorating return on invested capital, and expensive valuation at 80x one-year forward price-to-earnings.

On the constructive side, Morgan Stanley maintained an Overweight rating with a target price of ₹5,188. Motilal Oswal maintained a Buy rating with a revised target price of ₹5,200 (earlier ₹5,000), and said it raised FY27-FY28 profit estimates by around 3%-7%.

Quick commerce and costs emerge as key debate points

A key risk flagged in post-result commentary was competitive intensity from quick commerce. Emkay highlighted the threat from quick commerce and questioned whether DMart’s value proposition remains as differentiated as before.

Another point of discussion was the sustainability of recent demand trends. Emkay also said like-for-like growth improved, but DMart linked part of the uplift to a spike in consumer buying in March 2026 amid geopolitical tensions, which later normalised toward the end of the quarter. The report also mentioned a 5% increase in average basket value.

Store expansion pace and balance sheet signals

The company’s store roll-out remained a central variable in brokerage models. JM Financial said the accelerated store expansion plan included 85 stores added in FY26, the highest ever. Motilal Oswal also cited sustained acceleration in store additions, saying this ramp-up remained a key growth trigger.

ICICI Securities, meanwhile, maintained a Hold rating with a target price of ₹4,350 and said Avenue Supermarts crossed the 500-store milestone in FY26. It added that operating profit margin expanded 37 basis points year-on-year to 7.2%, but its channel checks suggested the company was working hard for incremental growth.

Key numbers at a glance

Brokerage targets and ratings mentioned

Market impact: what investors are focusing on

The immediate market impact was a decline in the share price despite double-digit profit growth, indicating that investors were focusing on operating and competitive indicators beyond headline earnings. Higher interest costs and lower other income were highlighted as drags on profit growth by at least one brokerage, linking them to funding requirements for a faster store opening plan.

At the same time, the debate is not only about near-term margins. It is also about whether DMart’s long-standing value positioning and store economics can sustain returns in a market where quick-commerce players are pushing convenience-led offerings and, potentially, pricing intensity.

Conclusion

Avenue Supermarts delivered year-on-year growth in Q4 FY26 profit and revenue, but the stock fell as brokerages debated cost pressures, margin trajectory, and the impact of faster expansion on leverage. With target prices ranging from ₹3,700 to about ₹5,270 in the commentary cited, investors are likely to track upcoming quarters for clarity on operating metrics, financing costs, and how the company navigates competition from quick commerce alongside continued store additions.