Brokerages have taken a cautious stance on Avenue Supermarts Ltd. after the DMart operator reported weaker‑than‑expected revenue growth in its June quarter business update. Analysts were on edge as it flagged slow growth momentum, continued sales growth was seen as being slower than expected, same-store sales were moderated and competition in the retail sector was rising.
The company reported standalone revenues of ₹18,343 crore for the first quarter of FY27, up 15.1 per cent year-on-year from year-earlier. This growth is good but was short of Street estimates and this is raising concerns as to whether DMart’s expansion rate can continue as much as it did before in the previous quarter for growth.
Avenue Supermarts ended the quarter with 503 stores, although one outlet in Navi Mumbai is closed for reconstruction. While store expansion is still happening, the incremental revenue per store is less than in previous years, they said.
Research shows that same‑store sales growth (SSSG) has slowed, a result of consumer caution and increasing competition from organized and online retailers. Rivals are rapidly expanding and offering discounts and DMart’s pricing advantage is under pressure.
A few analysts also mentioned margin risk for the company as well. Margin pressure and higher operating costs and competitive pricing strategies could lead to profit erosion in the next few quarters. The cautious tone suggests that while DMart is still a high-standing brand in the Indian retail landscape, its expansion trajectory is likely to be challenged due to high operating costs.
In short, Avenue Supermarts’ Q1 FY27 update has tempered investor optimism. Despite the growth in revenue of more than double, the miss against expectations and signs of a slow pace have led brokerages to hold back. How DMart will achieve that in the coming few quarters will be crucial to keeping it at the top in the competitive retail market in India.
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