Shares of , which operates the DMart retail chain, settled flat after climbing 3 per cent on the on Monday as the company posted a strong set of December-quarter earnings.
The stock closed flat at ₹3,832.50 on the NSE, soaring to a high of ₹3,918.60 in early trade against the previous close of ₹3,801.30.
The company reported 17.6 per cent jump in standalone net profit after tax for the quarter ended December 2025 at ₹923.05 crore against ₹784.65 crore in the year-ago period.
While the headline numbers were strong, brokerages were divided on how sustainable the performance is, with some cheering margin expansion and others flagging slowing growth and rising competition.
CLSA remained among the most bullish on the stock, reiterating its High Conviction Outperform rating and raising its target price to ₹6,185. The brokerage said DMart reported a gross margin of 14.6 per cent, which was 46–50 basis points higher than consensus and expanded 50 basis points year-on-year, with gross profit growing 17.2 per cent ahead of sales growth of 13.3 per cent. CLSA also highlighted a 47 basis point year-on-year improvement in EBITDA margin and 20 per cent growth in EBITDA. Although profit after tax rose 17.6 per cent, slightly behind EBITDA growth due to higher finance costs from short-term bridge loans taken to accelerate store additions, CLSA said it remained positive on the company and raised its FY26–FY28 earnings estimates by 1–7 per cent to factor in stronger profit growth.
Citi maintained a ‘sell’ rating on the stock with a target price of ₹3,150, citing a slowdown in underlying demand. The brokerage said same-store growth moderated to 5.6 per cent from 6.8 per cent in the September quarter and 7.1 per cent in the June quarter, leading to revenue growth of 13 per cent year-on-year, about 3 per cent below its estimates. Management, according to Citi, indicated that deflation in staples had partly weighed on revenue growth. While Citi acknowledged that gross margin expanded 50 basis points year-on-year and EBITDA and PAT grew 20 per cent and 18 per cent, respectively, it warned that the margin improvement may not be sustainable. The brokerage believes the gains were driven either by one-time discounts and additional margins from FMCG companies looking to liquidate inventory around GST rate changes, or by DMart rationalising discounts under new management to protect profitability amid slowing same-store growth and rising competition from quick-commerce players. Citi also pointed out that profit growth has lagged revenue growth in 10 of the last 12 quarters, reflecting competitive and cost pressures.
Jefferies struck a more neutral tone, retaining a ‘hold’ rating with a target price of ₹4,050. It said DMart continued to see moderation in revenue growth, with like-for-like growth at 5.6 per cent and the portfolio mix broadly unchanged. Even so, EBITDA margins expanded to a multi-quarter high, driving a 20 per cent year-on-year rise in EBITDA and an earnings surprise. Jefferies noted that store additions remain steady, though the March quarter could see lumpy expansion, and flagged the upcoming CEO transition. It also said management expects limited impact from new labour codes but added that disclosures remain an area of concern.
Nuvama also maintained a Hold rating, with a target price of ₹4,351. The brokerage attributed the higher profit growth primarily to better gross margins, which it expects to be linked to reduced discounting following GST rate cuts. It added that DMart Ready’s implied growth revived sequentially to over 20 per cent year-on-year. However, given the slower growth run rate and a stronger focus on margins, Nuvama tweaked its FY26 and FY27 revenue and profit estimates, trimming some projections while raising others to reflect the changing mix.
Domestic brokerage Motilal Oswal has reiterated ‘buy’ at ₹4,600 from ₹4,300 earlier, believing that increased pricing competition from QC could prevent margin sustainability and remains a key monitorable in the near term. HDFC Securities maintained add rating at a target price of ₹4,000.