Radhakishan Damani’s DMart plunges 5% despite double-digit revenue growth – What’s the big worry?

The decline came despite the retailer reporting double-digit revenue growth and adding new stores during the quarter.

The sharp fall has once again raised an important question for investors – Is this just a short-term reaction, or does the correction offer an opportunity for long-term buyers?

The stock has already slipped around 7% in the last five trading sessions. However, despite the recent weakness, it has delivered 9% returns over the past six months. The stock is up 7% so far this year and gained 8% over the last one year.

Let’s take a look at the key highlights of the Q1 business update from DMart –

DMart Q1 business update

For the quarter ended June 30, 2026, Avenue Supermarts reported standalone revenue of Rs 18,343.5 crore, a rise of 15.1% from Rs 15,932.1 crore in the same quarter last year.

The company also continued expanding its physical presence by opening three new stores during the quarter. This takes its total store count to 503. 

Alongside the business update, the company also announced that its board will meet on July 11 to consider raising funds through the issuance of debt securities.

A look back at the previous quarter

For Q4FY26, the retailer posted a net profit of Rs 656.6 crore, up 19% from Rs 550.9 crore in the corresponding period a year earlier.

Revenue from operations also increased 19% year-on-year to Rs 17,684 crore.

Why is DMart falling despite higher sales in Q1?

While the headline revenue growth remained healthy, analysts believe the numbers fell short of market expectations.

According to brokerage firm Motilal Oswal, standalone revenue grew 15% year-on-year to Rs 18,343 crore. This is below their earlier estimate of around 19% growth and pre-quarter expectations of nearly 17-18%.

The brokerage believes the performance appeared relatively soft considering the large number of store openings during the March quarter and the support from inflation-led price increases.

Another factor that caught analysts’ attention was the pace of expansion.

After opening as many as 58 stores during the March quarter, DMart added only three new stores in the June quarter. This has resulted in a much slower expansion compared with the previous quarter.

Motilal Oswal also pointed to weakening productivity metrics.

According to the brokerage, annualised revenue per store declined by nearly 4% year-on-year to around Rs 146 crore. Revenue generated per square foot also fell around 3% from the previous year. This indicates that newer stores are taking time to ramp up their sales.

DMart: Is the correction a buying opportunity?

Even after highlighting the weaker-than-expected operational performance, Motilal Oswal continues to maintain a ‘Buy’ rating on the stock.

For now, however, investors are likely to watch upcoming quarterly earnings more closely to assess whether revenue growth accelerates, store productivity improves and the pace of expansion picks up again.

The company’s proposed fund-raising plan, which will be considered by the board on July 11, will also remain an important development for the market.

The stock is currently trading well below its 52-week high of Rs 4,949.50 but comfortably above its 52-week low of Rs 3,529.