The stock of hypermarket chain D-Mart i.e. Avenue Supermarts saw a decline of 9% during early trading on Monday. This is the first time since January 2019 that this stock has seen such a big decline in a day. The biggest reason for the decline in the stock is the second quarter results. The company has recently released the results of the second quarter of the financial year 2025, which are weaker than the estimates. After this, many leading brokerage firms have downgraded the rating on the stock.

Global brokerage firm JPMorgan has downgraded Avenue Supermarts rating from Overweight to Neutral. Along with this, the target price has also been reduced from ₹ 5,400 per share to ₹ 4,700 per share. This target price is only 3% higher than Friday's closing price. Radhakishan Damani and other promoters hold 74.65% stake in the company. As such, after Monday's fall, their assets have declined by ₹ 20,800 crore.

Pressure of online competition in metro cities
The brokerage firm said in its note on this stock that the second quarter results have been weaker than expected. Due to weak like-for-like (LFL) sales, there is a slowdown in income growth. In big metro stocks, the company is facing pressure from online competition. The company itself has admitted that their business has been affected due to the online grocery format. This impact is so big that the same store sales growth (SSSG) has also been weaker than expected. This brokerage firm has cut SSSG and earnings growth estimates by 4-6% during FY25-27. Quick Commerce will continue to expand Morgan Stanley has reduced the target price on this stock to ₹ 3702 per share with an Underweigh opinion. Morgan Stanley says that after the management commentary, there is doubt about the earnings growth being 20%. D-rating is also possible further. Goldman Sachs has set a target price of ₹ 4,000 per share on Avenue Supermarts with a Sell opinion. This brokerage firm said that Quick Commerce is going to continue to expand, the effect of which will be seen on Avenue Supermarts in the future. It may take time to see the full effect, however, Bernstein has set a target of ₹ 5800 per share on the stock with an Outperform opinion on a positive note. This brokerage firm says that earnings growth has been weaker than expected, which is the lowest in the last 4 years. LFL growth is also at a 3-year low. Due to operating leverage, standalone EBITDA and margins were slightly lower on a yearly basis. However, the brokerage firm estimates that it may take 3-5 quarters to see the full impact. Strategy regarding private label is right CLSA has set a target price of ₹5,360 per share on Avenue Supermarts with an Outperform opinion. CLSA said that the company's income and profit in the second quarter were weaker than estimates. Gross margin was also 30 basis points lower than estimates. Profit was also weaker than estimates due to higher than expected employee cost. For FY25-27, CLSA has cut its estimate by 13-15%. The brokerage firm said that moving towards private label is the right decision for the company.