DMart shares slide 4% as Q1 FY27 update disappoints

What triggered the fall in DMart shares

Shares of Avenue Supermarts Ltd, which operates the DMart retail chain, fell over 4% in morning trade on Friday after the company released a softer-than-expected business update for the April to June quarter. The market reaction reflected concerns that sales momentum and expansion pace were below what some analysts had built into their forecasts. Brokerages largely retained cautious ratings, suggesting limited conviction on near-term acceleration.

The stock was seen around ₹4,016.50, down 4.07% in morning trade. It also hit an intraday low of ₹3,984.20, down as much as 4.86% on the BSE. At 10:10 AM, it was trading 4.13% lower at ₹4,014.85.

Q1 business update: revenue growth but slower than expected

For the quarter ended June 30, 2026, Avenue Supermarts reported a 15.13% rise in standalone revenue from operations to ₹18,343.49 crore. While the growth rate remained healthy in absolute terms, analysts flagged that it moderated versus expectations, especially considering store additions into the end of the previous quarter and a backdrop of higher FMCG inflation.

The company’s update also pointed to a slower pace of expansion and sales growth than some analysts had anticipated, even as DMart continued to add stores. One report noted DMart had a total of 424 stores across India.

How the market priced in the update

The decline in the share price was sharp enough to extend a weak recent trend. The stock was reported to be down about 4% over one month and 8% over three months. Another data point in the coverage noted that over the past two trading days, the stock price had slipped about 8%.

The immediate selling suggests investors were focused less on the headline revenue growth and more on the implication that same-store sales growth and store additions may not be tracking the pace assumed by the market.

Goldman Sachs stays on ‘Sell’ with a ₹4,000 target

Goldman Sachs maintained its ‘Sell’ rating on Avenue Supermarts with a target price of ₹4,000. The brokerage said revenue growth moderated in the June quarter despite strong store additions towards the end of the March quarter and higher FMCG inflation.

Goldman Sachs also outlined what it sees as key upside risks to its cautious view. These included a faster-than-expected pace of store expansion, successful scaling of DMart Ready, a slower shift towards online grocery shopping, and a stronger recovery in discretionary spending by middle-income consumers.

Macquarie keeps ‘Underperform’, flags disappointment

Macquarie retained its ‘Underperform’ rating on Avenue Supermarts with a target price of ₹3,100. The brokerage said this implied around 26% downside from Thursday’s closing price.

Macquarie described the June quarter sales performance as disappointing. It said both revenue growth and store additions fell short of its expectations and added that same-store sales growth was expected to have moderated from the March quarter.

Another brokerage cuts target, keeps ‘Hold’

The coverage also referenced a brokerage that maintained a ‘Hold’ rating while cutting its target price to ₹4,437 per share from ₹4,524 earlier. The revised target was stated to be based on 40x FY28 EV/EBITDA.

Even with a ‘Hold’ stance, a target cut after the business update signals that analysts are re-checking assumptions on growth trajectory and near-term operating performance.

What investors are watching in DMart’s operating story

The business update reinforced that DMart remains in expansion mode, but the pace and quality of growth is under scrutiny. Brokerages pointed to slower revenue momentum relative to expectations as a key issue. They also highlighted the possibility that same-store growth has cooled compared with the prior quarter.

Separately, one analyst note flagged competitive intensity in large urban markets, including pressure from quick commerce, as a continuing debate point for the stock. While the business update itself was the immediate trigger, the broader market focus remains on how DMart sustains its value positioning while defending traffic and basket sizes.

Key numbers at a glance

Why the update matters for the stock

For Avenue Supermarts, the stock often reacts not only to reported growth but to whether the update supports a view of sustained high growth at scale. The pullback after a 15.13% revenue increase shows that the market is benchmarking performance against elevated expectations.

Brokerages maintaining cautious ratings also suggests limited near-term rerating triggers, unless subsequent updates show faster store rollout, stronger same-store growth, or clearer progress in newer channels such as DMart Ready.

Conclusion

Avenue Supermarts’ shares fell more than 4% after its April to June business update indicated softer momentum than some analysts expected, despite standalone revenue rising to ₹18,343.49 crore. Goldman Sachs and Macquarie retained negative ratings with targets of ₹4,000 and ₹3,100, respectively, while another brokerage kept a ‘Hold’ and trimmed its target. Investors are likely to track upcoming commentary on store additions, same-store trends, and competitive intensity as the next set of signals for the stock.