Citi has maintained its sell rating on Avenue Supermarts with a target price of ₹3,250 per share after the retailer’s Q2FY26 results showed subdued profitability relative to revenue growth. The company reported consolidated revenue growth of 15.5% year-on-year to ₹16,676 crore, while EBITDA rose 11% to ₹1,213.6 crore and PAT increased 2.3% to ₹684.9 crore.
Citi noted that the results were slightly below its expectations, with EBITDA and PAT coming in 2% and 4% lower than estimates, respectively. The brokerage said same-store sales growth (SSG) moderated to 6.8%, compared with 7.1% in Q1FY26 and 8.1% in Q4FY25. Revenue per square foot rose modestly by 1.3% year-on-year, while EBITDA and PBT per square foot declined 2% and 7%, respectively, reflecting margin pressure.
The brokerage flagged that profitability continues to trail revenue momentum due to rising costs and competitive pricing pressures. It added that while D-Mart remains a strong retail franchise, the near-term risk-reward remains unfavourable given limited scope for margin recovery.
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