1QFY27: Margins in line; top-line growth recovery is key

Research evidence excerpt

1QFY27: Margins in line; top-line growth recovery is key

Update

July 12, 2026 01:31 PM GMT

Morgan Stanley India Company Private Limited+MAvenue Supermarts Ltd. | Asia Pacific Shravan Vohra

Equity Analyst

1QF27: Margins in line; top-line Shravan.Vohra@morganstanley.comArchana Menon, CFA +91 22 6118-2039

Archana.Menon@morganstanley.com +91 22 6118-2215

growth recovery is key Gaurav Varma

Research Associate

Gaurav.Varma@morganstanley.com +91 22 6118-1033

Reaction to earnings

Weakens our thesis Modest shortfall Modest revision lower

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Avenue Supermarts Ltd. (AVEU.NS, DMART IS)

Key Takeaways India Consumer | India

Top-line growth of 15% (19% in 4Q, MSe 19%) was weaker than expected, but Stock Rating Overweight

Industry View In-Line

known. Consolidated EBITDA margin of 8% (7.9% in 1QF26) was in line with Price target Rs5,083.00

expectations. Up/downside to price target (%) 25

Shr price, close (Jul 10, 2026) Rs4,081.10

Gross margin rose 50bps YoY to 15.8% (MSe 15.3%). Product mix improved with 52-Week Range Rs4,949.50-3,600.00

Sh out, dil, curr (mn) 633

80bps YoY higher share of General Merchandise & Apparel. Mkt cap, curr (mn) Rs2,583,567

EV, curr (mn) Rs2,582,065

LFL growth came off sharply sequentially at 5.5% (10.8% in 4Q), weakest in Avg daily trading value (mn) Rs2,188

seven quarters. Reported revenue per square foot for the quarter fell 2% YoY. Fiscal Year Ending 03/26 03/27e 03/28e 03/29e

Per management, in larger metros, the growth in older stores with high revenue EPS (Rs)** 45.65 56.05 67.39 81.02

EPS (Rs)§ 46.77 55.46 66.65 81.38

per square foot was flat, while non-metro stores performed well.