Shares of Avenue Supermarts Ltd (DMart), the retail chain led by Radhakishan Damani, experienced a 4% decline on October 12, 2026, following the release of its September quarter results. Global brokerages widely described the performance as a "margin shocker," marking an end to three consecutive quarters of improvement.
Q2 Performance Disappoints Analysts
The primary reasons cited for the unexpected downturn in profitability included an adverse product mix, subdued store-level productivity, and higher operating costs. This combination weighed heavily on the company's earnings, prompting a re-evaluation from several investment banks.
Brokerage Ratings and Price Targets
- PL Capital has issued the lowest target price among brokerages at Rs 3,214.
- Conversely, Bernstein holds the highest target at Rs 5,000.
- JPMorgan maintained a ‘Neutral’ rating with a target price of Rs 3,925.
- HSBC assigned a ‘Reduce’ rating, setting its target at Rs 3,340.
- Jefferies opted for a ‘Hold’ rating with a revised target of Rs 4,000. The firm noted strong traffic, higher inflation, and robust like-for-like (LFL) prints in Q2, but profitability suffered due to a higher food mix, weaker gross margins, wage inflation, and inventory build-up.
- UBS recommended a ‘Buy’ rating, projecting a target of Rs 4,500.
- Goldman Sachs suggested a target price of Rs 3,500.
- Nuvama Institutional Equities maintained a ‘HOLD’ with a revised target price of Rs 3,784 (down from Rs 4,174), attributing renewed margin pressure to be a key factor behind the stock's de-rating over the past 3.5 years.
- Systematix also suggested a ‘Hold’ rating with a target of Rs 3,520. While same-store sales growth (SSSG) for older stores improved to 9.5% in Q2, this did not translate into better overall profitability, reflecting the impact of lower-margin sales, operating cost pressures, and the gradual ramp-up of the expanded store base. Systematix anticipates higher Q3 revenue growth, supported by inflation, a lower base in 3QFY26, and increased store additions.
The varied outlooks from these prominent global brokerages highlight the uncertainty surrounding DMart's short-to-medium term financial trajectory following its challenging September quarter.