Global brokerage firm CLSA reiterated its 'High Conviction Outperform' rating on Avenue Supermarts, setting a target price of ₹6,406. This target indicates a potential upside of nearly 36 percent from current levels, underscoring the company's strong business model and strategic market initiatives.
Strong Customer Engagement and Competitive Edge
CLSA highlighted that DMart's strengths lie in its customer engagement, competitive pricing, and robust product assortment. The brokerage said that the company's consistent strategy of maintaining lower prices has been crucial in building a broad and loyal customer base. This pricing advantage, coupled with effective product positioning, enhances its market moat and long-term growth potential.
Shares of Avenue Supermarts have already gained 34 percent in 2025 YTD. However, CLSA noted that valuations still do not fully capture the company's faster pace of store expansions, its growing focus on private labels, and its improving profitability, all of which are expected to support sustained growth.
Expansion and Profitability Driving Growth Prospects
According to CLSA, Avenue Supermarts' rapid expansion strategy, coupled with the scaling up of private-label products, is set to strengthen its profitability further. The brokerage added that these initiatives reinforce DMart's competitive advantage and market resilience, allowing it to capture incremental market share in India's organised retail sector.
The note also stressed that DMart's long-term success rests on its ability to maintain customer loyalty while continuously improving margins, a factor that sets it apart from peers in the retail space.
DMart Q1 Results
DMart reported a largely unchanged net profit for the June quarter of FY26, as rising competition and margin pressures offset the benefit of strong revenue growth. The company gained from favourable pricing in staples and non-food categories, but heightened rivalry in the FMCG segment-particularly from quick commerce players-restricted profitability.
Net profit came in at ₹773 crore, almost flat compared to ₹774 crore in the same quarter last year. This muted performance was recorded despite a 16.3 percent year-on-year jump in revenue, which increased to ₹16,359.7 crore from ₹14,069 crore in Q1FY25.
On the operating front, consolidated EBITDA rose 6.4 percent to ₹1,299 crore against ₹1,221.2 crore a year earlier. However, EBITDA margin contracted to 7.94 percent from 8.68 percent in the corresponding period last year.
Stock Price Trend
The stock hit its 52-week high of ₹5,484 in September 2024 and 52-week low of ₹3337.10 in March 2025.
In the last 1 year, the stock has lost 5 percent but risen 109 percent in last 5 years. However, just in August, it has risen over 10 percent after a 2.4 percent fall in July.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.