Avenue Supermarts: Prabhudas Lilladher Recommends 'Hold' with Rs 3783 Target

• Prabhudas Lilladher raises FY26/FY27/FY28 EPS estimates for Avenue Supermarts (D'Mart) by 4.6%/3.5%/3.3% after Q3FY26 profits beat estimates.
• Q3FY26 results exceeded EBITDA/PAT estimates by 9.2%/10.2% due to lower overheads and healthy gross margins.
• Operating parameters remain weak, with sales per store, sales per square foot, and bills cut per store per day all declining YoY.
• Interest burden doubled to Rs 1011 million in 9 months of FY26, making D'Mart a candidate for equity dilution.
• Concerns exist over long-term margin sustainability due to intensifying quick commerce competition and volatile store economics; 'Hold' rating maintained.

Why It Matters: Prabhudas Lilladher maintains 'Hold' on Avenue Supermarts with a target of Rs 3783 despite strong Q3FY26 results.