Dmart's Growth Play: SEBI RA Rohit Mehta Sees ₹4,500 As Key Breakout Zone

Avenue Supermarts (DMart) shares have seen a notable recovery in 2025, gaining 17% year-to-date. 

SEBI-registered analyst Rohit Mehta breaks down the factors fueling this resurgence. 

The company's aggressive store expansion strategy has been a key driver. In the fourth quarter of FY25 alone, DMart added 28 new stores - the highest in a single quarter - bringing its total to 415 locations across India. 

This expansion is expected to boost revenue growth through increased market penetration and economies of scale.  

Unlike the flurry of competitors rushing into quick commerce (Q-commerce), DMart has chosen not to rush into rapid delivery services.

Instead, the company is enhancing its strengths by improving delivery timelines, expanding product assortment, and reinforcing its overall value proposition.

Mehta notes that this approach aims for sustainable growth rather than short-term market shifts. 

Financially, despite challenges, DMart reported a 17% year-on-year increase in standalone revenue for Q4 FY25, reaching ₹14,872 crore. While net profit dipped by 2% due to higher operating costs, the consistent revenue growth indicates strong consumer demand and operational resilience.  

On the balance sheet, the company is virtually debt free, indicating strong financial stability. 

Investor sentiment seems to be improving. The number of mutual fund schemes holding Avenue Supermarts stock rose to 195 in February from 172 in January. 

However, Mehta flags that the stock's valuation is a concern, It is currently valued at 12.7 times its book value, which may suggest overvaluation. Also, despite posting consistent profits, the company has not declared any dividends, which may disappoint income-seeking investors.

From a technical perspective, DMart has established support at ₹3,222 – ₹3,396, with a rounded bottom and higher lows, indicating a bullish continuation pattern. 

The stock is trading above short-term trendline support. Mehta believes that a move above ₹4,400–₹4,500 could confirm momentum.

Major resistance is seen at its all-time high of ₹5,900.75, and a breakout above this could lead to a significant rally, he added.

Data on Stocktwits shows that retail sentiment turned 'bullish' on this counter earlier this week. 

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