Goldman Sachs Upgrades DMart to Overweight, Predicts Strong Growth Ahead

Original: Goldman Sachs upgrades DMart to overweight, says juggernaut is rolling! Here’s why

The Economic Times•Apr 6, 20263 min

In a Nutshell

Goldman Sachs has upgraded Avenue Supermarts, the operator of DMart, to overweight, increasing its target price to ₹5,188, reflecting a 19% upside. The upgrade follows strong Q4 results and is based on expected store expansion, inflation benefits, and a robust retail strategy.

Key Points

01Goldman Sachs upgraded DMart to overweight with a target price of ₹5,188.
02The company plans to open around 85 new stores in FY26, boosting its growth potential.
03Inflation is expected to support same-store sales growth, enhancing revenue.
04DMart aims to expand its retail footprint significantly, targeting 2,200 stores.
05The company's Q4 FY26 revenue rose nearly 19% year-on-year.

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Full Summary

Goldman Sachs has upgraded Avenue Supermarts (DMart) to an overweight rating from equal weight, raising its target price to ₹5,188 from ₹4,552, indicating a potential upside of 19%. This decision follows a strong fourth quarter performance, where standalone revenue reached ₹17,204.50 crore, a 19% increase from the previous year. Analysts anticipate that DMart's topline growth will accelerate due to an aggressive store expansion plan, with approximately 85 new stores expected to open in FY26, compared to the 40-50 annual additions seen over the past four years. This expansion is projected to enhance revenue growth, which is expected to rise to 19-20% in FY27-28, supported by inflation that could bolster same-store sales growth. Furthermore, DMart is set to strengthen its market presence by entering new states like Odisha, Goa, and Uttarakhand, aiming to increase its total store count to 2,200 from around 500 currently. The new CEO, Anshul Asawa, is anticipated to bring a fresh perspective to the company's growth strategy.