Avenue Supermarts Limited: Same Steady Playbook, Near-Term Growth and Margins Remain Range-Bound

Research evidence excerpt

Avenue Supermarts Limited: Same Steady Playbook, Near-Term Growth and Margins Remain Range-Bound

tech) and management bandwidth to efficiently operate a

significantly larger store footprint, alongside upgrades to data stacks and systems

across categories, store operations and supply chain. We believe DMART will be

able to generate mid- to high-teens revenue growth over the medium term along

with broadly stable margin delivery; however, stock valuations will be affected by

the evolving dynamics in the online grocery space – DMART for now has decided

not to operate in the QC segment and try scaling slotted (<6 hr delivery) in key 11

cities in a profitable manner. At current share price levels, risk/reward is balanced.

Neutral.

• Steady store expansion likely ahead. DMART targets adding ~15% of base

stores annually over the medium term, despite accelerated store adds (+85) in

FY26 aided by faster land-to-store conversion (typically 2-3 years). While

capital and people are not the constraint for faster expansion, sourcing the land/

real estate at the right locations remains key. Additionally, DMART is

increasingly open to long leases (e.g., NCR) – 68 of 500 stores are now leased

(15 added in FY26 out of 85 total openings) – sticking to a cluster-based

densification approach across new and established markets. Importantly, new

stores (especially in Tier 2-3 cities) ramp slowly, hence recent openings may

not immediately reflect in reported growth.

• Addressing QC; a sharper, profitability-first DMART Ready. Though it

sees some competitive pressure in older metro markets, management reiterated

that large-basket/monthly shopping is not shrinking in metros and it sees no

material impact in non-metros yet. DMART Ready has been consolidated to 11