Avenue Supermarts Limited

Consumer Defensive — Discount Stores · NSE

₹3,342.00−₹36.40 (−1.08%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:48 pm

Understanding the Business

Company site ↗

The 60-second version of Avenue Supermarts Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Avenue Supermarts Limited engages in the business of organized retail and operation of supermarkets under the D-Mart brand name in India.

IndustryDiscount Stores

SectorConsumer Defensive

Employees20,994

Annual revenue₹68,685 Cr

How does it make money?

Turns over ₹68,685 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 20,994 employees supports ₹3.27 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.27 Cr

Who are its competitors?

The closest listed comparisons in its industry are TRENT LTD, TITAN COMPANY LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE36.7%

What is the outlook?

20 analysts covering the stock expect revenue to grow about 20.2% and earnings to grow about 18.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.2%

Est. earnings growth+18.8%

Analysts20

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +61% while net margin moved -22% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+61%

Margin effect-22%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 12.7% is moderate

Quality vs. Valuation

Company Quality

54/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

47/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

69.9x

3Y Median

102.8x

40 monthly readings · mean 103.5x · range 73.2x–135.3x

Sector Median

77.9x

median of 2 sector peers

🟢Current valuation is approximately 32% below its 3y median of 102.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 77.9x.

vs. its own history

Cheap

102.8x median over 40 months · -32%

vs. sector peers

Fair

77.9x median of 2 peers · -10%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

41.8x

PEG

9.09

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 18.8% to 16.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 277% over 3 years, from ₹643 Cr to ₹2,425 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 140% against revenue up 61% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹647 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 140% against revenue up 61%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 13% a year✓ 17.1% CAGR
Latest reported year was 17.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹647 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹2.18 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

69.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.35x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹47.82

Profitable

Profitable on a per-share basis

ROE

12.7%

Moderate

Moderate capital efficiency

ROCE

16.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

17.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.7%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹2,719 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

50.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

9.2%

Good

Assets are working hard

Operating Margin

5.5%

Average

Average margins

Net Margin

4.2%

Average

Average bottom-line conversion

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.25

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

3636.1 / 3774.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

21.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹42,735 Cr	₹50,701 Cr	₹59,233 Cr	₹68,685 Cr	+17.1%
EBITDA	₹3,759 Cr	₹4,225 Cr	₹4,597 Cr	₹5,259 Cr	+11.8%
EBITDA Margin	8.8%	8.3%	7.8%	7.7%	—
PAT (Net Profit)	₹2,379 Cr	₹2,536 Cr	₹2,708 Cr	₹2,970 Cr	+7.7%
EPS	₹36.49	₹38.93	₹41.5	₹45.63	+7.7%
ROE	14.8%	13.6%	12.6%	12.1%	—
ROCE	18.8%	18.3%	16.9%	16.4%	—
Total Debt	₹643 Cr	₹592 Cr	₹820 Cr	₹2,425 Cr	+55.7%
Free Cash Flow	₹418 Cr	₹15 Cr	-₹960 Cr	-₹647 Cr	—

🟢 Revenue has grown at 17.1% a year over 3 years.

🟢 EBITDA has grown at 11.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.8% to 7.7% over 3 years (-1.1 pts).

🟢 PAT (Net Profit) has grown at 7.7% a year over 3 years.

🟢 EPS has grown at 7.7% a year over 3 years.

🔴 ROE has fallen from 14.8% to 12.1% over 3 years (-2.7 pts).

🔴 ROCE has fallen from 18.8% to 16.4% over 3 years (-2.4 pts).

🔴 Total Debt has grown at 55.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹418 Cr to -₹647 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹29,524 Cr

Total Liabilities

₹5,062 Cr

Cash & Equivalents

₹766 Cr

Operating Cash Flow

₹3,467 Cr

Capex

-₹4,113 Cr

Shareholding (proxy)

Institutional Holding

13.0%

Insider Holding

78.9%

Corporate Actions

Next Earnings

07 Jan 2027

Analyst Consensus

Recommendations

12 Buy · 11 Hold · 9 Sell

Target Price (Mean)

₹3,909.44

+17.0% vs CMP

Target Range

₹2,800 – ₹5,723

Peer Comparison

Company	P/E	ROE
TRENT LTD	87.2x	25.9%
TITAN COMPANY LIMITED	68.5x	36.7%

Recent News

4 mixed1 negative1 general

Avenue Supermarts Share Price near 52-week low: analysis

Univest, 15 Oct

DMart share price hits over 3-year low; down 28% from April high

Business Standard, 16 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Avenue Supermarts shares fall despite strong Q2 update | What’s weighing on DMart?

Livemint, 05 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Jefferies And Morgan Stanley Trim DMart's Price Targets On Q2 Profit Miss, But The Long-Term Bet Remains Intact: Here's Why

NDTV Profit, 12 OctResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Avenue Supermarts shares fall 6% as Citi maintains 'sell' rating on stock

Moneycontrol.com, 05 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Avenue Supermarts shares fall 6% despite sequential revenue recovery; Here's what analysts said

CNBC TV18, 05 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Risk

MiddlingBusiness Quality · Growth

WeakProfitability · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑