DMart shares fall over 4%: Why Motilal Oswal sees 18% upside despite flat growth in metro cities

DMart’s Q1 growth slowed as metro stores went flat, but Motilal Oswal sees 18% upside with a Rs 4,800 target—see the key triggers.

Written by Sparsh Bansal

July 13, 2026 09:04 IST

A sleek, high-end financial analytics screen mapping out consumer retail performance. The interface tracks Avenue Supermarts metrics, spotlighting a bold ₹4,800 target price with an 18% upside curve, layered over financial modules comparing flat metro store revenue against a resilient 15% overall top-line expansion.

Motilal Oswal emphasise value accumulation based on DMart's strong footprint growth in non-metro regions. (Image: twitter)

The Avenue Supermarts share price 4.24% to a low of Rs 3,908 on the NSE after it reported its results for the first quarter of FY27. The revenue growth for the D-Mart parent company moderated to 15% as like-for-like growth decelerated to 5.5%. The profit this quarter was also in line with expectations. Moreover, DMart Ready continued to rationalise its footprint, exiting 7 additional cities with marginal contribution and limiting its presence to just 11 cities.

Motilal Oswal on DMart

Motilal Oswal has raised the price target on Avenue Supermarts to Rs 4,800, implying an upside of more than 18% from the current market price. The brokerage house maintained its ‘Buy’ rating on the stock.

According to the brokerage house, the impact of competitive intensity in large metros and the performance of recently opened stores in tier 2 cities remain key monitorables. “We continue to build 85-90 annual store additions in FY27-29,” said the brokerage house.

The brokerage house pointed out that growth deceleration to 15% in Q1FY27 is a dampener, given significant store additions in Q4FY26 and an overall inflationary environment. This has reignited concerns about DMart losing market share to quick commerce (QC) in large metro cities, said Motilal Oswal.

Avenue Supermarts

The parent of DMart’s net profit stood at Rs 860.6 crore in Q1FY27, rising 11.3% year-over-year, compared to Rs 773 crore reported in the same quarter a year ago.

Its top-line came in at Rs 18,794 crore for the first quarter of the current fiscal year, as against Rs 16,359 crore in the corresponding period a year back, surging 15% YoY.

On the operating front, the Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) surged to Rs 1,499 crore in Q1FY27, ahead of Rs 1,299 crore in Q1FY26. At the same time, its EBITDA margin rose to 7.97% from 7.94% last year.

The company highlighted that in large metros, growth in older stores, which have significantly higher revenue per square foot, was flat this quarter. While stores in non-metros continue to grow well.

Avenue Supermarts share price performance

The share price of Avenue Supermarts has risen 1% in the last five trading sessions. The stock has dropped 0.6% in the past one month. However, the stock has risen 6.5% in the last six months. Avenue Supermarts share price has risen 1.6% over the previous 12 months.

This article was first uploaded on July thirteen, twenty twenty-six, at four minutes past nine in the morning.