DMart Stock Falls 4% After Q1 Update; Goldman Sachs, Macquarie Stay Bearish
DMart stock falls 4% after Avenue Supermarts, the operator of the popular retail chain, released its provisional business update for the April-June quarter (Q1 FY27), which failed to meet market expectations. Although the company reported double-digit revenue growth, investors were disappointed by slower sales momentum and a lower pace of store additions. The weak update prompted leading global brokerages, including Goldman Sachs and Macquarie, to maintain their cautious outlook on the stock.
Shares of Avenue Supermarts declined more than 4% in early trading as investors reacted to the company’s operational performance. Despite the fall, the stock has still outperformed the broader market so far in 2026, reflecting investors’ long-term confidence in India’s organised retail sector. However, analysts believe increasing competition from quick-commerce platforms and moderating growth could continue to pressure the company’s valuation.
Q1 Revenue Growth Misses Street Expectations
According to the company’s business update, standalone revenue from operations increased 15.1% year-on-year to ₹18,343.49 crore during the June quarter.
While the growth remained healthy, analysts expected stronger performance because of rising FMCG inflation and the large number of stores opened in previous quarters. Revenue growth was therefore viewed as slightly below expectations, leading to a negative reaction in the stock market.
The business update is provisional and will be followed by detailed quarterly financial results later this month.
Why Did DMart Shares Fall?
The market reaction was driven by concerns over slower operational momentum rather than weak financial performance.
Investors expected higher revenue growth after the retailer accelerated store expansion earlier this year. However, analysts noted that the latest quarter saw relatively slower store additions compared to recent years, raising questions about future growth.
Another concern remains the rapid expansion of quick-commerce companies offering grocery deliveries within minutes, which continues to increase competition in urban markets.
Goldman Sachs Retains ‘Sell’ Rating
Following the business update, Goldman Sachs maintained its ‘Sell’ rating on Avenue Supermarts with a target price of ₹4,000.
The brokerage said revenue growth moderated despite favourable industry conditions, including higher food inflation and significant store additions at the end of the previous quarter.
Goldman Sachs also highlighted that the pace of new store openings during Q1 was slower than recent trends, limiting the company’s growth potential in the near term.
Macquarie Also Remains Bearish
International brokerage Macquarie continued its cautious stance on the stock.
The brokerage believes competitive pressures from quick-commerce platforms continue to affect DMart’s growth outlook. It also noted that slower same-store sales growth and changing consumer shopping behaviour could impact future earnings.
Macquarie maintained its negative recommendation, indicating limited upside from current market levels.
Competition From Quick Commerce Intensifies
India’s grocery retail market has changed rapidly over the past two years.
Quick-commerce platforms offering deliveries within 10 to 30 minutes have attracted urban consumers seeking greater convenience. Companies such as Blinkit, Swiggy Instamart and Zepto continue expanding aggressively, increasing pressure on traditional supermarket chains.
Although DMart continues to attract value-conscious shoppers through competitive pricing, analysts believe the company must continue adapting to evolving consumer preferences.
Long-Term Growth Story Remains Intact
Despite short-term concerns, many market experts remain optimistic about DMart’s long-term prospects.
The company continues expanding its store network across India while maintaining one of the strongest balance sheets in the retail sector. Its focus on operational efficiency, low pricing strategy and disciplined expansion has helped build a loyal customer base over the years.
Industry analysts believe organised retail in India still has significant room for growth, providing long-term opportunities for Avenue Supermarts despite increasing competition.
What Investors Should Watch
Investors will now focus on the company’s detailed quarterly earnings announcement.
Key factors likely to influence sentiment include:
- Same-store sales growth
- Operating margins
- Profit growth
- Pace of future store additions
- Management commentary on quick-commerce competition
- Outlook for the remainder of FY27
These metrics will provide a clearer picture of whether the slowdown reflected in the business update is temporary or part of a broader trend.
Market Outlook
Although DMart stock falls 4% after the Q1 update, analysts say the company’s long-term fundamentals remain relatively strong.
However, elevated valuations leave little room for operational disappointments. Investors are expected to closely monitor future earnings and expansion plans before reassessing the stock’s growth potential.
With competition intensifying across India’s retail landscape, Avenue Supermarts will need to balance expansion, profitability and customer experience to maintain its leadership position.
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