Competitive Pressures May Cap DMart Margins

Stock dips 3.44% in early trade but recovers to close 1.07% lower

- RAM PRASAD SAHU

The stock of India's largest listed pure-play retail company, Avenue Supermarts (DMart), has slipped over 10 per cent from its monthly highs. A weak operational performance in the fourth quarter (January-March) of financial year 2024-25 (Q4FY25) and muted near-term outlook due to intense competitive pressures and higher costs could lead to downward momentum on the stock. While the stock dropped up to 3.44 per cent in early trade on Monday, it recovered a bit to close 1.07 per cent lower at ₹4,017.

The revenue performance of the retailer was healthy, registering a growth of 16.7 per cent year-on-year (Y-o-Y), aided by network expansion as well as higher same-store sales (SSS) growth. While the company's store area grew 14 per cent, the rest was accounted for by a 2.7 per cent increase in revenue per store. SSS growth for units over two years old came in at 8.1 per cent. The company added 28 stores in the quarter, taking the total to 415.