# Avenue Supermarts Posts 18.4% Revenue Growth in Q2 as Higher Operating Costs Pressure Margins

> DMart operator Avenue Supermarts reported strong quarterly sales growth of 18.4%, while net profit rose at a more moderate 7.6% amid margin compression.

**Type:** article · **Category:** Money · **Published:** 2026-10-10 · **Source:** TrendKia
**Canonical:** https://trendkia.com/en/money/avenue-supermarts-ki-dusari-timahi-men-aya-18-4-pratishata-barhi-shuddha-munapha-804-karora-rupaye-para-pahuncha-46000 · **Language:** English
**Tags:** DMart, Avenue Supermarts, Quarterly Results, Stock Market, Retail Sector, DMart Ready

Avenue Supermarts, the operator of the hypermarket chain DMart, registered double-digit top-line growth during the second quarter of the financial year. The company published its quarterly financial scorecard on Saturday, 10 October, showing resilient consumer demand across its store footprint alongside rising cost pressures that tempered bottom-line expansion.

## Standalone Financial Metrics and Earnings Growth
On a standalone basis, DMart recorded revenue of Rs 19,206 crore for the July-September quarter of FY27, marking an 18.4% year-on-year increase compared with Rs 16,219 crore in the corresponding period of the previous fiscal year. Operating earnings reflected consistent momentum, with EBITDA climbing 14.1% to Rs 1,403 crore against Rs 1,230 crore reported twelve months earlier.

Net profit after tax rose 7.6% to reach Rs 804 crore, improving from Rs 747 crore generated in the second quarter of the prior year. Earnings per share followed this upward trajectory, coming in at Rs 12.32 per share compared with Rs 11.47 in the baseline comparison quarter.

## Margin Contraction Highlights Cost Challenges
While top-line expansion remained robust, profitability growth lagged behind sales momentum, leading to noticeable margin compression across operational metrics. The retailer standalone EBITDA margin contracted by 30 basis points to settle at 7.3%, down from 7.6% recorded in the second quarter of the previous financial year.

The standalone PAT margin witnessed a similar dilution, dropping from 4.6% to 4.2%. This divergence indicates that even though overall product turnover expanded significantly, a smaller proportion of each revenue rupee translated into operational and net profits during the quarter.

## Same-Store Performance and Network Expansion
In an encouraging operational trend, mature retail locations demonstrated accelerated demand. Stores operational for two years or longer posted same-store sales growth of 9.5% in Q2 FY27, noticeably outpacing the 6.8% growth rate recorded by the same cohort of stores during the corresponding period last year.

Physical store additions gathered pace during the second quarter, with DMart opening 15 new outlets to bring its total store network to 518 locations. This brought total additions for the first half of the financial year to 18 stores, following a modest addition of 3 outlets during the April-June period. The chain entire footprint now spans 21.4 million square feet of retail real estate. Among the 518 locations, one store situated in Navi Mumbai remains temporarily non-operational due to reconstruction work.

## Consolidated Balance Sheet and Half-Year Performance
On a consolidated level, which incorporates performance from digital and e-commerce operations under DMart Ready, second-quarter revenue reached Rs 19,644 crore compared with Rs 16,676 crore a year earlier. Consolidated net profit advanced to Rs 743 crore from Rs 685 crore, while consolidated EPS rose to Rs 11.40 from Rs 10.53.

Consolidated EBITDA reached Rs 1,393 crore versus Rs 1,214 crore, yielding an operating margin of 7.1% compared with 7.3% previously. Consolidated PAT margin finished at 3.8%, down from 4.1% in the prior-year period.

Across the entire first half of FY27, consolidated revenue expanded to Rs 38,439 crore against Rs 33,036 crore in the previous year. Cumulative EBITDA for the six-month period stood at Rs 2,892 crore compared with Rs 2,513 crore, while net profit amounted to Rs 1,603 crore against Rs 1,458 crore. Half-year EPS reached Rs 24.60 versus Rs 22.41. Ahead of the weekend results announcement, shares of Avenue Supermarts ended Friday trading session 1.79% lower at Rs 3,521 on the NSE.

## What this means for you
These financial figures indicate healthy consumer spending alongside ongoing operational cost headwinds for market investors and retail consumers.

- **For Equity Investors:** Strong top-line figures are offset by shrinking profit margins across standalone and consolidated operations. This margin dilution could influence price action when trading resumes.
- **For Retail Shoppers:** The addition of 15 new stores expands physical accessibility across targeted regions. Consumers in newly covered localities gain access to large-format discount grocery shopping.
- **For E-Commerce Consumers:** Consolidated numbers confirm steady expansion through DMart Ready digital channels. Customers continue to utilize home delivery options alongside physical retail formats.
- **For Retail Competitors:** Same-store sales growth improved to 9.5% for locations older than two years. This acceleration indicates strong footfall retention in mature hypermarket setups.

## Why this happened
The divergence between revenue acceleration and profit growth stems from distinct operational dynamics and business expansion factors during the quarter.

- **Revenue Driver:** Healthy consumer demand across established stores and contributions from network additions drove top-line growth to 18.4%. Same-store growth accelerated to 9.5%, supporting overall transaction volumes.
- **Cost Pressures:** Operating expenditures increased at a faster clip than net earnings, dragging down standalone EBITDA margin to 7.3%. Rising overheads reduced the net profit margin from 4.6% to 4.2%.
- **Aggressive Store Rollout:** After opening just 3 outlets in the first quarter, the company launched 15 stores during Q2. Initial gestation and opening costs associated with new locations weighed on near-term margins.

## Questions & Answers

### 1. What was DMart's standalone revenue for Q2 FY27?
DMart recorded standalone revenue of Rs 19,206 crore, reflecting an 18.4% year-on-year increase.

### 2. What was the company's standalone net profit in the second quarter?
Standalone net profit rose by 7.6% to Rs 804 crore compared with Rs 747 crore a year earlier.

### 3. How did profit margins perform during the quarter?
Standalone EBITDA margin contracted to 7.3% from 7.6%, while PAT margin slipped to 4.2% from 4.6%.

### 4. How many new stores did DMart add in Q2?
The retailer opened 15 new stores during the quarter, bringing its total store count to 518.

### 5. What was the same-store sales growth for older locations?
Stores operational for two years or older recorded a growth of 9.5% during the quarter.

### 6. Where did DMart shares close ahead of the weekend results announcement?
On Friday, DMart shares closed 1.79% lower at Rs 3,521 apiece on the NSE.

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