Mon Oct 14 12:05:29 UTC 2024: ## DMart Shares Plunge 9.3% as Q2 Earnings Disappoint

**Mumbai, India -** Shares of DMart’s parent company, Avenue Supermarts, plummeted by 9.3% in early trading on Monday, hitting a low of Rs 4,143.60 on the Bombay Stock Exchange (BSE). The sharp decline follows several brokerage firms downgrading the stock and lowering its target price, citing disappointing second-quarter (Q2) earnings that failed to meet market expectations.

While DMart reported an 8% year-on-year (YoY) increase in profits, the company’s profit after tax fell by over 12% compared to the previous quarter. This, combined with the company’s total revenue reaching Rs 14,050.32 crore (a 14% YoY increase), left investors and analysts wanting more.

One major factor contributing to DMart’s slump is the growing competition from quick commerce platforms, which are rapidly gaining market share, especially in metro cities. These platforms are impacting DMart’s sales and eating into its profit margins.

Leading brokerage firms have issued their assessments:

* **JPMorgan** downgraded DMart from “Overweight” to “Neutral” and lowered its target price from Rs 5,400 to Rs 4,700, citing rising costs and competition from online grocery platforms.
* **Morgan Stanley** took an even more cautious approach, downgrading the stock from “Overweight” to “Underweight” and slashing its target price from Rs 5,769 to Rs 3,702. The firm noted that DMart’s sales and profit margins were weaker than expected, and the growing online competition could hinder the company’s goal of achieving a 20% growth rate.
* **Nuvama** maintained a “Hold” rating on the stock but lowered its target price from Rs 5,183 to Rs 5,040, pointing to weaker store performance in Q2 with only a 5.5% sales increase from existing stores. DMart Ready, the company’s online grocery service, also saw slower growth.
* **Prabhudas Lilladher** downgraded DMart from “Accumulate” to “Hold” and reduced its target price from Rs 5,168 to Rs 4,748. They highlighted the impact of online competitors on DMart’s sales, particularly in metro cities. The company’s costs also increased due to the opening of six new stores during the quarter.

Retail investors are advised to remain cautious and observe how DMart responds to these challenges in the coming quarters before making any major investment decisions. Investors considering purchasing the stock should carefully assess the company’s ability to compete with online grocery platforms and effectively manage costs.

At around 10:55 am, DMart shares were trading 7.86% lower on the BSE at Rs 4,212.90.

**Disclaimer:** The views expressed in this article are solely those of the experts/brokerages and do not represent the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any investment or trading decisions.

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