DMart Receives ₹6,105 Price Target Implying 63% Upside Ahead of Q3 Results
CLSA has set a ₹6,105 price target for Avenue Supermarts, implying 63% upside despite a slight reduction from ₹6,300. The analyst maintains a 'High-Conviction Outperform' rating, citing DMart's robust low-cost model and expanding private label portfolio. Q3 revenue grew 13% YoY to ₹17,613 crore with 442 stores, while the company continues expanding into smaller towns and strengthening its competitive position in India's price-sensitive retail market.
*this image is generated using AI for illustrative purposes only.
Avenue Supermarts has received a revised price target of ₹6,105 from CLSA, down from the previous target of ₹6,300, yet still indicating substantial upside potential of 63% from Friday's closing price of ₹3,745.10. The revision comes ahead of the company's third-quarter financial results scheduled for Saturday, January 10.
Analyst Maintains Bullish Outlook
CLSA analyst Aditya Soman has maintained a 'High-Conviction Outperform' rating for the retail chain, emphasizing the strength of DMart's fundamental business model. According to Soman, the company's low-cost operator model remains robust, and concerns regarding competition from quick commerce platforms are overdone.
The analyst highlighted DMart's strategic advantages in the competitive retail landscape:
| Key Strength | Impact |
|---|---|
| Low-cost operations | Enables competitive pricing to consumers |
| High sales velocity | Achieves better operational scale |
| Private label expansion | Drives next level of market share gains |
| Small town expansion | Rapidly scaling business model |
Q3 Business Performance
DMart's Q3 business update revealed solid operational metrics for the quarter ended December 31, 2025:
| Metric | Q3 FY26 Performance |
|---|---|
| Standalone Revenue | ₹17,613 crore |
| YoY Growth | 13% |
| Total Store Count | 442 stores |
Strategic Positioning and Market Dynamics
Soman emphasized that DMart's competitive moat continues to strengthen through its virtuous business cycle. The company's ability to operate with low costs allows it to offer competitive prices, leading to high sales velocity and better scale, which further reduces costs and enables market share gains in India's price-sensitive retail market.
The analyst noted that DMart is rapidly scaling its private-label assortment, which is expected to drive the next level of share gains. Additionally, the DMart model is being aggressively expanded to smaller towns, broadening its market reach and customer base.
Earnings Forecast Adjustment
CLSA has trimmed its FY26-28 earnings per share forecast by 1-3% to reflect slower sales growth expectations, which warranted the reduction in the target price. Despite this adjustment, the analyst maintains confidence in the company's long-term prospects and competitive positioning.
Stock Performance Context
DMart's share price has remained relatively flat on a 12-month basis and is trading nearly 24% lower from its 52-week high of ₹4,949.50 achieved in September. While the analyst expects the stock price to remain under pressure given slower sales growth in the near term, the core investment thesis remains intact based on the company's status as the lowest-cost operator in the segment.
Historical Stock Returns for Avenue Supermarts DMart
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.14% | -6.05% | -11.18% | -25.39% | -23.45% | 0.0% |
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