Stock Market Today: DMart Share Price Gains More Than 4% Post In-Line Q1 Results

The stock market saw a surge in Avenue Supermarts Ltd or DMart share price on Monday, with a gain of more than 4% in opening trades following the company’s Q1 results announcement over the weekend.

DMart share price opened at ₹5,126.45, marking a 3.69% increase from the previous close of ₹4,943.65. The share price then rose by 4.4% to reach highs of ₹5,164 on the NSE on Monday.

The company reported a 17.5% rise in consolidated net profit to ₹773.8 crore for the April-June 2024 quarter, compared to ₹658.8 crore in the same period last year. Operating revenue also increased by 18.6% to ₹14,069 crore in the first quarter of the current fiscal year.

Analysts noted that DMart’s performance met expectations, with Ebitda growing by 18% year on year to Rs1220 crore. While same-store-sales-growth was slightly soft, analysts attributed it to recent store additions and changing consumer preferences.

Analysts at Jefferies India Pvt Ltd mentioned that the revenue growth was healthy at 18% year on year, driven by store additions and low-double-digit SSG. They also highlighted that DMart’s Q1FY25 gross margin improved, but investments towards service levels and future capabilities impacted profitability.

Despite the positive performance, analysts raised concerns about the steep valuation of DMart at 90 times one year forward price to earnings. They recommended maintaining hold with slightly tweaked earnings estimates and target prices.

Overall, analysts have varying recommendations for DMart, with some maintaining hold ratings and others revising target prices based on the company’s operating performance and future prospects. Investors are advised to consult with certified experts before making any investment decisions.