Street View: India's DMart's margin pressure to stay as quick commerce competition ramps up

Avenue Supermarts

05/05/2025 08:21

May 5 (Reuters) - ** India's DMart AVEU.NS fall 0.5% 4.038 rupees after posting drop in Q4 margins due to increasing competition from quick commerce firms and higher costs

** AVEU, on average, rated 'hold' and mean price target at 4,083.46 - data compiled by LSEG

MARGIN PRESSURE TO SUSTAIN IN FY26

** Goldman Sachs ("sell," PT: 3,400) says gross margin woes due likely to sustain in FY26, with rev growth unlikely to accelerate as food inflation may offset faster store expansion

** BofA ("underperform," PT: 3,725) says short-term and mid-term impact of competition on pricing and gross margins, especially in metro cities, needs to be seen

** J.P.Morgan ("neutral," PT: 4,150) cuts EBITDA estimates by ~2% on lower margin assumptions despite raising revenue estimates

** CLSA ("outperform," PT: 5,549) lowers FY26-27 earnings estimates to reflect higher near-term costs due to faster store additions

 ($1 = 84.3040 Indian rupees)

 (Reporting by Nandan Mandayam in Bengaluru)

 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))