Investor attention is set to focus on Avenue Supermarts, the operator of the popular DMart retail chain, when markets open on Monday, 5 January. This follows the company's release of its business performance update for the December quarter, which showed robust growth in operational revenue and store expansion.
Strong Quarterly Performance and Store Expansion
In a regulatory filing submitted after market hours, Avenue Supermarts reported standalone revenue from operations of ₹17,612.62 crore for the third quarter of the fiscal year 2026 (Q3FY26). This figure marks a significant year-on-year increase of 13.15% compared to the ₹15,565.23 crore recorded in the same quarter of the previous fiscal year.
The company continued its physical expansion during the quarter by opening 10 new DMart stores. This addition brings the total store count to 442 outlets across the country. It is important to note that this total includes one store in Sanpada, Navi Mumbai, which is currently closed for customers due to reconstruction work.
Brokerage Outlook and Long-Term Growth Story
The update comes after the company's performance in the September quarter (Q2FY26), where it posted a consolidated net profit of ₹684.85 crore, a 3.85% rise year-on-year, with operational revenue growing 15.45% YoY to ₹16,676.30 crore. Brokerage views have been mixed post the Q2 results, but a notably optimistic stance comes from global brokerage CLSA.
CLSA has selected DMart as one of its top investment bets for the year 2026, framing the company's narrative around long-term free cash flow generation. The brokerage drew parallels with global retail giants like Walmart and Costco, noting that aggressive store expansion often leads to negative or minimal free cash flow in the initial years.
CLSA expects DMart to remain in this expansion phase in the near term, with store additions projected at 15–20% annually. The management's long-term visibility extends to a potential network of 2,200 stores, and the brokerage maintains that the long-term demand environment for DMart remains favourable.
Competitive Positioning and Share Price Context
In its analysis, CLSA also addressed the rise of quick commerce, suggesting it is expected to account for less than 20% of urban consumption even by the fiscal year 2035. This projection indicates substantial growth runway left for DMart's physical retail model. To further strengthen its value proposition, DMart is aggressively expanding its private-label portfolio. These products are typically priced 40–50% lower than branded alternatives, and in some cases, at just one-third of the price.
On the stock market front, DMart shares have faced considerable selling pressure since September 2025, declining by 22% from those levels. This correction followed a strong bull run between February and August 2025, where the stock rallied 40%. For the full calendar year 2025, the stock managed a modest gain of 6.20%, recovering from a 12.8% drop in 2024. Currently, the stock is trading 37% below its all-time high of ₹5,900.
Disclaimer: This article is for informational purposes only. The views and recommendations mentioned are those of individual analysts or brokerage firms. Investors are advised to consult certified experts before making any investment decisions.
