Avenue Supermarts, the company behind D‑Mart, posted a better‑than‑expected profit for the third quarter of FY26, prompting analysts to raise their earnings forecasts for the next three years.
Q3 FY26 performance beats expectations
The retailer’s earnings before interest, taxes, depreciation and amortisation (EBITDA) and net profit were about 9% and 10% higher than analysts had predicted. The lift came from lower operating costs and solid gross margins, even though the cost of retailing rose slightly.
- Sales per store fell 1.1% year‑on‑year.
- Sales per square foot slipped 0.3%.
- Average bill value stayed flat.
- Interest expenses doubled, reaching roughly ₹1,011 million for the nine‑month period.
Revised earnings outlook
Because of the strong quarter, Prabhudas Lilladher increased its earnings‑per‑share (EPS) estimates for FY26, FY27 and FY28 by 4.6%, 3.5% and 3.3% respectively. The firm now expects a 12.5% annual EPS growth rate over FY26‑28.
Store‑opening plan
D‑Mart added ten new stores in Q3 FY26. The analyst expects the rollout to speed up, with a total of 57 stores in FY26, 65 in FY27 and 70 in FY28. More stores should help lift earnings if margins stay healthy.
Challenges ahead
Despite the upside, the company faces growing competition from quick‑commerce players and a shifting product mix that could pressure margins. Store economics remain volatile, and higher interest costs could make equity dilution more likely.
Analyst rating
The research team values D‑Mart at about ₹3,783 per share, which works out to roughly 65.5 times the projected FY28 EPS. Because the stock already trades at a rich multiple, the analysts keep a “Hold” rating, expecting most of the returns to come later.
Bottom line
In short, Avenue Supermarts delivered a solid Q3 profit, leading to modest upgrades in earnings forecasts and an optimistic store‑expansion plan. However, competition and rising costs mean investors should stay cautious.
Remember, this is just one viewpoint—not a prediction. Do your own research before making any investment decisions.