Avenue Supermarts Q2 Highlights: Steady Growth Amid Margin Pressure

, operating the DMart chain, posted a consolidated net profit of ₹685 crore in Q2 FY26, marking a ~4% year-on-year increase. Revenue from operations rose ~15.5% to ₹16,676 crore. That said, margins came under pressure. EBITDA margin narrowed by ~29 bps to 7.28%, and the PAT margin contracted to ~4.1% from ~4.6%. Total expenses surged ~16% driven by higher costs across procurement, staff, and other operational heads. The company added 8 new stores, taking its total store count to 432 as of September 30. What Investors Should Focus On * Margin Recovery Strategy: Whether Avenue can pull back operating costs and improve productivity to restore margin cushion. * Same-Store Growth vs Format Expansion: Growth from existing stores (SSG) is critical to validate demand sustainability beyond expansion. * Store Expansion Discipline: The pace, location mix, and capital intensity of new stores will influence medium-term returns. * Cost Absorption & Operating Leverage: As the scale increases, balancing fixed vs variable costs will be key to converting top-line strength into bottom-line gains. * Management Outlook & Guidance: Commentary on macro environment, consumer sentiment, inflation, and operating headwinds will matter a lot more than this quarter’s numbers. Bottom Line Avenue Supermarts delivered a solid topline performance, aided by expansion and consumer demand. But margin contraction brings into focus the challenge of retaining profitability in a capital-intensive, competitive retail environment. Execution on cost levers, store productivity, and demand resilience will be crucial to justify investor optimism going forward. Source: Money Control No Recommendations