Avenue Supermarts (DMart) shares saw a decline following Q1 FY27 results, with slowing same-store sales growth in metro cities and increased competition posing short-term challenges.
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Avenue Supermarts (DMart) shares fell over 2% following its Q1 FY27 results, which showed muted performance. While revenue grew, same-store sales growth slowed significantly, particularly in metro cities, due to increased competition from quick commerce players. Despite improvements in gross margins from general merchandise and apparel, higher employee and operating costs, along with increased interest expenses from borrowings for store expansion and losses in subsidiaries, put pressure on EBITDA and net profit margins. The company added only three new stores this quarter and approved issuing NCDs worth 1000 crore for future expansion. DMart is focusing on metro cities, closing operations in other areas to concentrate on profitable markets. Key challenges include slowing growth in metro cities, competition, and rising costs, with investors watching the company's ability to escalate growth and maintain profitability.
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