Should you buy, sell or hold DMart after Q3 results? Here’s what brokerages say

Avenue Supermarts, the parent company of Diversified Retail chain DMart, reported its financial results for the October-December period at the weekend. In the third quarter of the current financial year, the company’s consolidated profit stood at Rs 724 crore, marking an increase of 4.8 percent over the same period last year. Mumbai-headquartered DMart’s revenue grew 17.7 percent to Rs 15,973 crore, according to an official filing.

DMart’s net profit fell short of analysts’ expectations even though revenue hit the mark. According to Zee Business research, DMart was expected to report net profit of Rs 832 crore and revenue of Rs 15,683 crore in the third quarter of the current financial year.

DMart posted Rs 1,218 crore in quarterly earnings before interest, taxes, depreciation and amortization (EBITDA), up 8.8 percent year-on-year.

Its margin, a key measure of profitability, fell 60 basis points (bps) to 7.6 percent.

Zee Business analysts put DMart’s quarterly EBITDA at Rs 1,290 crore and a margin of 8.2 percent.

Here’s what global brokerages are making of DMart’s Q3FY25 results

JPMorgan reiterated its ‘neutral’ stance on the counter with a cut price target of Rs 4,150- implying healthy gains of around 13 percent from the previous period. The brokerage indicated that DMart’s Q3 EBITDA/PAT was 3/5 percent below its estimates due to employee/other costs that were expected. Gross margin was flat sequentially and year over year despite negative mix (food share increased year over year in Q3). It also highlighted the appointment of Anshul Asawa as CEO-designate was an important development.

Citi also maintained its earlier ‘sell’ call when the target was reduced to Rs 3,350, implying a potential downside of more than 9 percent from last. The brokerage said that despite the improvement in SSG’s same-store sales growth (from 5.5 percent in 2Q to 8.3 percent in 3Q); EBITDA/PAT missed. Also, confirmed that Neville Noronha will step down on Jan’26.

Meanwhile, another brokerage Bernstein remained bullish on the stock, setting a target of Rs 5,800 per share – which translates to more than 57 percent of the fund’s potential earnings. The global brokerage said the company delivered a positive Q3FY25 despite expectations remaining low. In addition, it revealed that the decline in Q3 EBITDA margin and PAT was due to a larger share of grocery. Bernstein stressed that same-store sales growth appears to be entering a phase of recovery, however it may be seasonal. It expects moderate improvement for SSG over the next quarter or two.

Weakness in FMCG share will continue and grocery will continue to grow as a key strength, it added.