DMart Share Price Falls As Analysts Wary Of Slow Growth In Q2

Shares of Avenue Supermarts Ltd. declined over 4% on Friday as brokerages remained concerned about the rising headwinds after its second quarter update.

The DMart operator's revenue from operations rose 14% to Rs 14,050.32 crore for the quarter ended Sept. 30, 2024.

Avenue Supermarts reported a 17.5% increase in net profit in the first quarter of fiscal 2025. It also registered a revenue growth of 18.6% during the period at Rs 14,069 crore.

Goldman Sachs cut its fiscal 2025–27 estimates by 2%. Rapid rise of quick commerce players is adversely impacting Avenue's growth in key urban markets, and there is a risk that store additions this fiscal may fall short of management guidance, the brokerage said.

Morgan Stanley pointed out that growth was below expectations and expressed the need for management clarification on the slowdown. Topline growth was driven by weak same-store sales growth, with an implied growth rate of 3%, it said.

DMart stock fell as much as 4.84% during the day before paring loss to trade 3.12% lower at Rs 4,788.2 apiece, compared to a 0.24% decline in the benchmark Nifty 50 as of 10:17 a.m.

It has risen 23% during the last 12 months and has declined 17% year-to-date. Total traded volume so far in the day stood at 15 times its 30-day average. The relative strength index was at 30.

Fourteen of the 27 analysts tracking the company have a 'buy' rating on the stock, five suggest a 'hold' and eight recommend a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 5.3%.