DMart Parent Explodes 15% After Crushing Q3 Earnings Retail stocks, including Vishal Mega Mart, V2 Retail, and Baazar Style Retail, experienced significant gains on January 3, buoyed by optimism from Avenue Supermarts’ (DMart) positive Q3 business update. The upbeat sentiment followed DMart’s strong performance for the October-December period, sparking expectations of similar outcomes for its peers.

At 11:40 AM, Baazar Style shares rose 7.6% to Rs 342.95 on the NSE, while V2 Retail hit a 5% upper circuit at Rs 1,728.8. Newly listed Vishal Mega Mart climbed 5.8% to Rs 113.56 per share. In contrast, V-Mart Retail, which had earlier seen gains, settled at Rs 3,875, up 0.3%.

V2 Retail, operating 150 stores across 112 cities in 17 states, reported strong September quarter results. The company’s revenue surged 58% year-on-year, with Same Store Sales Growth up nearly 25% compared to the same period last year. Additionally, its monthly sales per square foot improved to Rs 1,219, up from Rs 1,085 a year earlier. The retailer also added 45 new stores in the first nine months of the fiscal year.

V-Mart Retail reported a 16% revenue growth for the December quarter, driven by a 10% Same Store Sales Growth.

Avenue Supermarts, which operates DMart stores, posted a standalone revenue from operations of Rs 15,565.23 crore for Q3 FY25, marking a 17.5% increase compared to Rs 13,247 crore in the same quarter last year. As of December 31, 2024, DMart had 387 stores in operation.

These results reflect strong growth across the retail sector, with investors expressing renewed confidence in the market. However, financial experts advise conducting due diligence or consulting certified advisors before making investment decisions.

 

Avenue Supermarts Shares Surge 15% as Q3 Revenue Rises 17.5% YoY

DMart Parent Explodes 15% After Crushing Q3 Earnings Shares of Avenue Supermarts, the operator of the DMart retail chain, soared 15% to ₹4,152.75 on the NSE on Friday, January 3, following a strong business update for Q3 FY25. The company reported standalone revenue of ₹15,565.23 crore for the quarter ending December 31, 2024, marking a 17.49% year-on-year (YoY) growth.

By the end of December 2024, Avenue Supermarts operated 387 stores, adding 10 new locations during the quarter. The revenue figures are subject to a limited review by the company’s statutory auditors.

For context, Avenue Supermarts’ standalone revenue for the same quarter last year was ₹11,304.58 crore. Founded by Radhakishan Damani and his family, DMart offers essential home and personal products across states such as Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab, and Rajasthan.

 

Q2 FY25 Performance Highlights:

• Net Profit: Increased by 5.78% YoY to ₹659.44 crore, compared to ₹623.35 crore in the same quarter last year.
• Revenue from Operations: Grew 14.41% YoY to ₹14,444.50 crore, up from ₹12,624.37 crore.
• Total Expenses: Rose by 14.94% to ₹13,574.83 crore.
• Total Income: Increased by 14.34% to ₹14,478.02 crore.
• New Stores: Six stores were added during Q2, bringing the total to 377 by September 30, 2024.

According to CEO and Managing Director Neville Noronha, the first half of FY25 saw like-for-like revenue growth of 7.4% for stores operating for two years or longer, with Q2 FY25 growth for the same cohort at 5.5%.

While Avenue Supermarts shares surged following the Q3 update, they have declined by 8% over the past 12 months.

 

DMart Parent Avenue Supermarts Shares Surge 15% Post Q3 Update, Analysts Remain Mixed

DMart Parent Explodes 15% After Crushing Q3 Earnings Avenue Supermarts Ltd., the parent company of DMart, saw its shares climb to the 15% upper circuit at ₹4,152.75 on January 3, following a robust Q3 FY25 business update. The company reported a 17.5% year-on-year (YoY) revenue growth to ₹15,565 crore, the highest in several quarters and 2% above market estimates. Sequentially, sales rose by 11%.

Avenue Supermarts added 10 new stores during the quarter, bringing its total store count to 387 by December 31, 2024. This compares to six new stores added in the previous quarter. Despite the strong numbers, analysts remain divided on the stock’s outlook.

 

Analyst Views:

• CLSA: Rated Avenue Supermarts as ‘Outperform’ with a price target of ₹5,360, indicating a potential upside of 48%.
• Morgan Stanley: Assigned an ‘Underweight’ rating with a target of ₹3,702, citing weaker growth trends compared to historical averages.
• Goldman Sachs: Maintains a ‘Sell’ rating with a target price of ₹3,425, highlighting concerns about margins and competition from quick-commerce players.
• Citi: Also gave a ‘Sell’ rating with a target of ₹3,500, noting challenges from product mix changes, smaller town store additions, and increasing competitive pressure.

 

Performance Metrics:

• Revenue per store has shown a five-year CAGR of 2.7% (4.4% YoY growth), while revenue per square foot (throughput) posted a five-year CAGR of -1.5% (3.4% YoY growth).
• Store additions have slowed, with 22 stores opened in the first nine months of FY25 compared to 41 in FY24 and 40 in FY23.

Citi expressed caution regarding risks to same-store sales growth (SSG), revenue growth from store additions, and earnings, due to declining throughput and gross margin pressure.

 

Analyst Consensus:

Among 29 analysts covering Avenue Supermarts, 11 have a ‘Sell’ rating, nine recommend ‘Buy,’ and the remaining nine suggest ‘Hold.’

While shares rallied 15% on the Q3 update, analysts are keeping a close watch on competitive dynamics and the company’s margin trajectory.