Mon Jan 13 04:50:27 UTC 2025: ## DMart Stock Takes a Hit as Analysts Slash Earnings Forecasts Amidst Rising Competition

**Mumbai, India** – Shares of Avenue Supermarts Ltd (DMart), a prominent Indian retail chain, are facing downward pressure following disappointing December quarter results that prompted several analysts to reduce their earnings estimates and target prices. The company’s Q3 revenue, EBITDA, and profit grew by 17%, 10%, and 6% respectively, falling short of analysts’ expectations.

The primary reason cited for the underperformance is intensifying competition, particularly from online grocery platforms in metropolitan areas. This increased competition has forced DMart to offer higher discounts, impacting gross margins. Several brokerage firms have consequently revised their forecasts downwards.

Antique Stock Broking, for example, cut its EBITDA estimates by 5-12% over FY25-27, citing the impact of increased competition and the recent departure of the CEO, Neville Noronha. They lowered their target price to Rs 3,978 from Rs 5,026. Centrum Broking also highlighted the aggressive market share gains of quick commerce players as a negative factor, downgrading DMart’s earnings by 15% for FY25-27E and setting a target price of Rs 4,160.

Nuvama and Motilal Oswal Financial Services (MOFSL) also reduced their earnings estimates, citing margin pressures and increased competitive intensity. MOFSL noted that recent funding rounds for major quick commerce players have significantly heightened competition. While they expect DMart’s value-focused model to remain viable long-term, they anticipate near-term pressure on growth and margins due to pricing competition.

Despite the negative outlook, several analysts maintain a relatively positive long-term view of DMart. However, the consensus is that the company faces significant challenges in the near term due to the competitive landscape and margin pressures. The impact of the management change, with Anshul Asawa taking over as MD & CEO from March 15th, remains to be seen.

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