D Mart Shares Slip as Goldman Sachs Cuts Price Target After Q2 Update
The beginning of the new trading week has brought a mild setback for Avenue Supermarts Ltd., the parent company of the popular retail chain DMart, as its shares fell following a cautious note from major global brokerage Goldman Sachs. The stock slipped around 1% in early trade on Monday to ₹4,375 after the brokerage firm cut its price target on Avenue Supermarts to ₹3,370 from ₹3,450, maintaining its “sell” recommendation.
The move came soon after the company released its business update for the July–September 2025 quarter (Q2FY26), which showed revenue growth that, while positive, fell short of analysts’ expectations. DMart’s performance is often viewed as a barometer for India’s organized retail sector, and its Q2 update has prompted investors to reassess near-term growth prospects.
DMart’s Revenue Grows, But Pace Slows Slightly
In its latest quarterly business update, Avenue Supermarts reported standalone revenue of ₹16,218 crore, up 15.4% year-on-year. While this represents healthy double-digit growth, it is marginally below the company’s three-year compounded annual growth rate (CAGR) of 15.8%. Analysts say this slight moderation indicates that while the business continues to expand, the pace of growth is not as strong as in the post-pandemic recovery phase.
During the quarter, DMart added eight new stores, taking its total count to 432. For the first half of the current financial year (April–September 2025), the company has added 17 stores, continuing its steady but cautious expansion strategy.
Industry experts note that DMart’s focus remains on sustainable growth and operational efficiency rather than aggressive expansion. However, the slower store additions and modest revenue performance have led some analysts to trim their short-term earnings outlook.
Brokerages Turn Cautious Amid Soft Growth Trends
Goldman Sachs, in its latest note, pointed out that DMart’s sales growth during the quarter was weaker than expected, even though the company was working off a relatively low base from the previous year. The brokerage said there has been “no meaningful acceleration” in the rate of new store openings and that growth trends have not shown a significant rebound yet.
As a result, the firm revised its FY2026 sales growth estimate down to 18% from 20% earlier and also trimmed earnings per share (EPS) forecasts for FY2026–FY2028 by 2%. This downgrade in financial projections prompted the cut in price target to ₹3,370, reflecting a cautious stance on the stock’s near-term performance.
Meanwhile, JPMorgan maintained a “neutral” rating on Avenue Supermarts with a price target of ₹4,350, noting that while DMart continues to show consistent growth, the current quarter’s revenue data could weigh on the stock in the short term. JPMorgan emphasized that investors will be closely watching future store additions, the performance of DMart Ready (the company’s online platform), and the impact of any GST-related changes on margins and pricing.
Analyst Sentiment Divided on Avenue Supermarts
The overall analyst sentiment toward Avenue Supermarts appears divided at the moment. Out of the 31 analysts covering the stock, 10 have a “buy” rating, 10 suggest “hold”, and 11 have issued a “sell” recommendation. This balanced outlook reflects a mix of optimism over DMart’s long-term brand strength and caution over its near-term financial trajectory.
Despite the recent correction, Avenue Supermarts has had a solid run in 2025, with the stock rising around 24% so far this year. Much of this momentum has been driven by investor confidence in India’s consumption story and DMart’s efficient cost management model. However, the current slowdown in sales growth has brought the focus back on how the company will sustain its profitability amid rising competition from both offline and online retail players.
Outlook: Focus on Efficiency and Long-Term Strategy
For now, Avenue Supermarts continues to focus on expanding its footprint in key urban and semi-urban markets, optimizing supply chains, and improving the customer experience through DMart Ready. Analysts believe the company’s long-term fundamentals remain strong, with a loyal customer base and disciplined pricing strategy that gives it an edge over competitors.
However, the near-term pressure highlighted by brokerages could weigh on the stock in the coming weeks. The company’s ability to boost store growth and deliver consistent same-store sales improvement will be key to regaining investor confidence.
Additionally, the retail giant is expected to benefit from improving consumer sentiment during the upcoming festive season. Historically, the October–December quarter has been one of the strongest for DMart, driven by higher spending on groceries, apparel, and home products. Investors will be keenly watching whether the company’s festive quarter can help offset the current slowdown and restore positive market sentiment.
Conclusion
Avenue Supermarts’ Q2 update shows that the company continues to grow, but at a slightly slower pace than before. While global brokerages like Goldman Sachs and JPMorgan have taken a cautious view for now, DMart’s strong business model and brand loyalty remain solid long-term strengths.
The short-term market reaction reflects investor sensitivity to earnings expectations, but with India’s retail consumption story still intact, Avenue Supermarts remains a key player to watch in the organized retail space. The next few quarters will be critical in determining whether the company can reignite faster growth and sustain its market leadership.
Disclaimer:
This article is for informational and educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a qualified financial advisor before making investment decisions. Stock markets are subject to risks, and past performance is not indicative of future results.
