DMart Profits Rise 11% Amid Quick-Commerce Competition Pressures

Avenue Supermarts Ltd., the operator of DMart, reported a consolidated net profit of ₹860.6 crore for the first quarter of FY27, an 11.3% increase year-on-year. Revenue from operations rose approximately 15% to ₹18,795 crore. Despite these gains, the company's shares fell as much as 4% following the announcement, as investors reacted to slowing same-store sales growth.

Managing Director and CEO Anshul Asawa noted that mature stores aged two years and older grew by 5.5%, down from 7.1% in the previous year. While non-metro markets performed well, growth in older stores within large metros remained flat, a trend attributed to intense competition from quick-commerce platforms such as Blinkit, Swiggy Instamart, and Zepto.

To streamline operations, the company's e-commerce arm, Avenue E-Commerce Ltd (DMart Ready), reported a loss of ₹91.39 crore and exited seven cities, reducing its footprint from 25 cities to 11 to focus on profitability in large metros. DMart expanded its physical presence by adding three stores, bringing its total count to 503, and its board approved raising up to ₹1,000 crore through private placements of non-convertible debentures.

Market reactions were divided. Motilal Oswal maintained a Buy rating and raised its target price to ₹4,800. Conversely, Goldman Sachs, Citi, and Emkay reiterated Sell ratings, citing premium valuations and weakening growth indicators.