Dmart: Maintaining Cautious Outlook

Company is poised for 19% growth in FY2026/27

- Anshul Asawa, CEO designate, Dmart

DMART reported 17.7% y-o-y revenue growth for Q3FY25, driven by a 13.5% y-o-y expansion in retail area and a 3.6% y-o-y increase in average throughput. Same-store sales growth (SSSG) improved to 8.3%, up from 5.5% in Q2FY25. The gross margin stood at 14.7% (KIE estimate: 15.0%, Q3FY24: 14.9%), pressured by heightened price competition in the FMCG segment. Elevated operating costs led to a 63 bps y-o-y contraction in margins, limiting EBITDA growth to 8.7% y-o-y. We revise our FY2025-27E earnings per share estimates (EPS) downward by 3-5%. Maintain SELL with a target price of ₹3,450.