These factors have led to earnings cuts and downgrades by brokerages. Despite the correction, the stock trades at 68–75x its 2026-27 (FY27) earnings estimates. Analysts warn the stock may continue to underperform if operating metrics do not improve or store expansion remains sluggish.
Analyst Abhijeet Kundu of Antique Stock Broking observes that key monitorables for DMart will include a recovery in sales of higher-margin general merchandise and apparel, stabilisation of mature-store SSS growth, and the company’s ability to counter online grocery competition.
The company’s SSS growth fell to 6.8 per cent in the second quarter (July–September/Q2) of 2025-26 (FY26) from 8.4 per cent in 2024-25 (FY25). Antique Stock Broking notes that Q2FY26 growth came despite a relatively low base of 5.5 per cent in Q2FY25, with the company typically delivering high single-digit like-for-like growth.
Kotak Securities highlights that the rising proportion of older stores, combined with slow new additions, may weigh on SSS growth. Analysts Garima Mishra and Ishani Swain note that DMart’s older stores continue to increase as a share of total outlets. In 2019-20, 131 of DMart’s 214 stores were over three years old, representing 61 per cent of the total. By FY25, that proportion rose to 68 per cent and may continue climbing unless store expansion accelerates. Mature stores generally generate slower SSS growth as market potential peaks, making new store additions critical.
The brokerage has cut SSS growth assumptions for FY26 through 2027-28 (FY28), translating into a 1–3 per cent revenue reduction and a 3–7 per cent cut in earnings per share estimates over the period. It retains a ‘sell’ rating on the stock with a target price of ₹3,570.
Multiple brokerages have highlighted the impact of heightened competition. Goldman Sachs Research expects competitive pressure to remain elevated near-term, which could further affect growth and margins. It cites rapid qcom growth and fresh capital raises to justify its cautious outlook. The industry’s net order value (NOV) reached $12–13 billion as of September 2025, more than doubling over the past 12 months, with a projected 2029-30 NOV of $50 billion, implying roughly 40 per cent annual growth.
Swiggy has announced a capital raise of up to $1.1 billion, while Zepto raised $450 million, likely intensifying competition further. Blinkit plans to expand dark stores from 1,816 in Q2FY26 to 3,000 by the fourth quarter of FY27. Analysts led by Arnab Mitra project that Blinkit’s NOV could exceed DMart’s net sales in FY27. Goldman Sachs has cut its earnings estimates by 1–3 per cent for FY26–28 to account for slower growth amid rising competition and maintains a ‘sell’ rating with an unchanged target of ₹3,425.
At 75x FY27 price-to-earnings, DMart’s valuations remain elevated despite the recent correction over the past four months.