11 July, 2025-Shares of Avenue Supermarts Ltd, the parent company of retail giant DMart, fell over 2% in early trading on Thursday, ahead of the company’s Q1 FY26 results announcement. The decline comes despite strong earnings expectations, with market estimates projecting a 14% year-on-year increase in net profit to ₹883 crore.
According to analysts, the revenue for the April–June quarter is expected to witness healthy growth, driven by increased footfall and steady demand across key categories such as food, household essentials, and apparel. Avenue Supermarts is also projected to report revenue of approximately ₹13,950 crore, marking a significant year-on-year improvement.
Despite these positive indicators, investor sentiment appeared cautious. Market experts suggest the fall in stock price could be attributed to concerns over the company’s high valuation, as well as broader sectoral trends impacting retail and FMCG counters. Several analysts noted that strong earnings may have already been factored into the current stock price, leading to profit-booking ahead of the results.
Brokerage firms expect DMart’s EBITDA margins to improve marginally during the quarter due to better operating leverage and disciplined cost control. However, they also caution that future guidance from the management, especially on store expansion and consumer demand trends, will be closely monitored by investors.
The Indian retail sector has been navigating challenges related to inflation, changing consumer preferences, and intensifying competition from online platforms. Despite these headwinds, Avenue Supermarts continues to maintain a dominant position, backed by its low-cost operational model and aggressive expansion strategy.
Most brokerages, including ICICI Securities and Axis Capital, have retained their “Buy” or “Hold” recommendations on the stock, citing strong fundamentals. However, they also point out that the premium valuation could come under pressure if the company fails to sustain its growth momentum in the coming quarters.
The company’s Q1 earnings report is expected to provide critical insights into its operational performance, expansion plans, and management outlook for the remainder of FY26.
