DMART’s structural resilience in food demand supports mid-teens revenue growth, but margin compression and capex intensity limit EBITDA expansion to 50–100 bps and FCF generation, tying valuations to execution risks in cluster expansion and same-store productivity.
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3-Scenario Framework
📊 Base Case (50% Probability)
LFL Growth Stability: LFL growth settles at 5–6%, with revenue/sq. ft. flat y-o-y. Store additions contribute 60% of revenue growth, but margin pressure persists.
Structural Margin Compression: EBITDA margins contract by 50 bps due to promotional intensity and input costs, partially offset by operating leverage.
Implication: Revenue CAGR of 12–14%; EBITDA margins at 8.5–9.0%. In line with consensus, but FCF lags due to capex.
