DMart Q2 Profit Rises 8.5% to Rs 743 Crore, but Margins Slip as Sales Jump 18%

Avenue Supermarts, the company that runs the DMart chain of value supermarkets, reported a consolidated net profit of Rs 742.98 crore for the July–September quarter on Saturday evening, up 8.5% from Rs 684.85 crore a year earlier. Revenue from operations climbed a much faster 17.8% to Rs 19,644 crore, from Rs 16,676 crore.

That gap between sales growth and profit growth is the headline number from the Radhakishan Damani-promoted retailer's second-quarter scorecard. DMart is still selling a lot more each quarter, but it is keeping a slightly smaller slice of every rupee it takes in.

The margin squeeze in numbers

Consolidated EBITDA, a measure of operating profit before interest, tax, depreciation and amortisation, rose 14.7% to about Rs 1,393 crore from roughly Rs 1,214 crore. Because that growth trailed revenue, the EBITDA margin narrowed to around 7.1% from 7.3% in the same quarter last year.

The squeeze shows up more sharply further down the income statement. Net profit margin fell to about 3.8% from 4.1%, which works out to roughly Rs 3.80 of profit on every Rs 100 of sales, compared with about Rs 4.10 a year ago. Basic earnings per share rose 8.3% to Rs 11.40 from Rs 10.53.

For a grocery-led retailer that runs on thin margins and competes mainly on price, a 20 to 30 basis point move is not trivial. The company's filing does not break down how much of the pressure came from staff costs, new-store expenses, product mix or pricing, so the exact cause is not yet clear.

Fifteen new stores, 518 in total

DMart opened 15 stores during the quarter, taking its network to 518 locations as of September 30. New outlets add to revenue quickly but usually take time to reach the sales density of mature stores, while their rent, staffing and set-up costs arrive on day one. That pattern can weigh on margins during a phase of steady expansion.

The parent company's standalone revenue, which DMart had already disclosed in its early-October business update, rose 18.4% to about Rs 19,206 crore. Consolidated figures, which also include subsidiaries such as the DMart Ready online grocery business, are the better guide to the group's overall performance.

First-half picture

The pattern holds across the first six months of the financial year. Consolidated revenue for April–September rose about 16.4% to Rs 38,439 crore from Rs 33,036 crore, while net profit grew about 9.9% to roughly Rs 1,603 crore from Rs 1,458 crore.

In other words, DMart has delivered double-digit top-line growth in both quarters of FY27, but its bottom line has grown at a noticeably slower pace.

What to watch

Because the numbers came out on a Saturday, investors will get their first chance to react when markets open on Monday. Analysts are likely to focus on three things: same-store sales growth, which strips out the effect of new openings; whether margins stabilise in the festive-heavy October–December quarter; and how much the company's quick-commerce and online grocery push is costing.

The result also lands in a tougher backdrop for consumer companies. The Reserve Bank of India raised its repo rate this week for the first time since 2023, and higher borrowing costs could test household spending in the months ahead. A value retailer like DMart may benefit if shoppers trade down, but it will have limited room to raise prices without blunting the low-cost pitch that drives its footfall.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.