
Bernstein has maintained its “Outperform” rating on Avenue Supermart (DMart) with a target price of ₹5,800, following a better-than-expected Q3 FY25 performance. The company posted a 17.7% YoY growth in revenue, totaling ₹15,972.55 crore, beating consensus estimates by 1.8%. Same-store sales growth (SSSG) improved significantly to 8.3% (from 5.5% in Q2 FY25), driven by festive season demand and strong store additions. DMart also added ten stores during the quarter, reflecting its aggressive expansion strategy.
However, EBITDA margins dropped to 7.6% from 8.3% in Q3 FY24, as the gross margin slipped to 14.7% due to an increased share of grocery in the mix and higher operating expenses. PAT grew modestly by 4.8% YoY to ₹723.54 crore. Bernstein notes the weakness in FMCG’s contribution persists, while the grocery segment continues to gain traction as DMart’s key strength.
A significant announcement in Q3 FY25 was the appointment of Mr. Anshul Asawa as CEO Designate, effective March 2025. He will take over as MD & CEO from February 2026, replacing Neville Noronha. Bernstein remains cautious about the sustainability of SSSG growth in upcoming quarters, attributing the Q3 uplift to seasonal festive demand. The brokerage highlights that DMart’s grocery dominance could limit recovery in FMCG growth and keep margins under pressure in the near term.