DMart Q2 FY26 — Growth Resilient, Margins Tight

Avenue Supermarts, the operator of DMart, reported steady growth in the September quarter but saw its profitability under pressure due to rising costs. Key Highlights: Revenue: ₹16,676 crore, up 15.4% YoY, driven by higher footfall and strong performance in food & grocery segments. Net Profit: ₹685 crore, up ~4% YoY, but down 11% QoQ as operating expenses rose. EBITDA Margin: At 7.3%, lower than last year’s 7.6%, indicating inflationary pressure and higher employee costs. Store Expansion: 8 new stores added this quarter, taking the total to 432. Older Stores: Mature stores (2+ years old) grew 6.8% YoY, showing healthy demand recovery. DMart Ready Update: The company exited 5 cities for its online grocery arm to refocus operations and optimize efficiency. Management Commentary: The management highlighted strong demand in staples and daily essentials but noted that discretionary spending remains under pressure. They also mentioned that GST rate benefits have been passed on to consumers, reflecting DMart’s value-for-money positioning. What’s Driving the Stock: Revenue momentum remains strong, suggesting consistent market share gains. Cost escalation and margin compression continue to weigh on near-term profitability. Investors are watching how the company balances expansion with operating efficiency. Key Takeaways: DMart continues to grow steadily but faces challenges in margin improvement amid rising competition and inflation. The focus for the coming quarters will be on cost control, efficient inventory management, and digital execution through DMart Ready. Learning Insight: For investors, DMart remains a long-term compounder story—steady growth, disciplined execution, and high brand trust—but near-term margin recovery will be key to stock performance.