DMart Losing Steam? Avenue Supermarts Stock Under Pressure as Emkay Flags ‘Structural Concerns’ | Buy Or Sell?

Avenue Supermarts Share Price Today: Shares of Avenue Supermarts, known by its brand name DMart, remained under pressure during Monday's trading session after Emkay Research flagged 'structural concerns' in the value retail supermarket chain's business operation.

Although DMart has a strong brand value, it has been slow to expand TAM (Total Addressable Market). "It has a low ~1.5% market share and caters to only ~50% of the Indian retail TAM vs Walmart's 7-8% share and ~100% US retail market TAM," as per Emkay Research report.

Avenue Supermarts Share Price Recommendation

DMart's unique NPV model's benefit is fading away due to an increase in capex-per-store percentage over the past three financial years. "DMART has a unique fully-owned COCO model, per which it is expected to generate 25- 30% higher NPV vs the leased store model. However, with ~60% increase in capex-perstore over FY22-25 (vs FY14-22), the NPV benefit of opening stores via own equity is fading (cost of equity: 11.6%)," highlighted Emkay Research in its report, released on Monday, April 13.

Although DMart has seen an encouraging risse in store adds in the financial year 2025-26, a shift to leased stores or continuation of the "current 100% equity model can lead to de-rating."

Emkay Research has initiated a 'Sell' rating for the diversified retail stock and has underlined the need for "structural reforms".

Key Factors That May Fuel DMart Upside

Sizable TAM expansion (category/channel/consumer cohorts) or ramp-up of high-margin stream can boost Avenue Supermarts performance in the present financial year.

"In our view, DMART could have also leveraged its goodwill to expand into other large and unorganized categories, such as fresh, durables, jewelry, and sports. However, wide market gaps and DMART's low accessibility have led to the emergence of the QC industry as well as scale-up of players like Decathlon, Croma, Trent, Nykaa, etc."

Avenue Supermarts Share Price Target

"We initiate coverage on DMART with SELL and TP of Rs3,700, based on DCFimplied multiple of 54x FY28E SA EPS (~93% value), with remaining ~7% value derived from its subsidiaries."

Avenue Supermarts share price was trading 0.91% higher at Rs 4440 per share on BSE at 12:20 pm. The stock opened lower and had dipped to an intraday low of Rs 4281.65 per share earlier in the day.

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