Avenue Supermarts, which runs the DMart chain of stores, posted a flat net profit for the June quarter of FY26 (Q1FY26), as rising competition and margin pressures offset revenue growth. Profit for the June quarter came in at Rs 773 crore versus Rs 774 crore reported last year, missing analysts’ estimates by a wide margin. Bloomberg consensus estimates had pegged Q1 net profit at Rs 883 crore.
While the firm benefited from favourable pricing in staples and non-food categories, which helped the retailer post a 16.3% year-on-year rise in revenue to Rs 16,360 crore for the quarter, the company has been feeling the pressure of competitive intensity especially from quick commerce players. The rise in revenue was in line with Bloomberg consensus estimates which had pegged the number at Rs 16,583 crore for the period.
Earnings before interest tax depreciation and amortisation (Ebitda) was up 6.4% year-on-year to Rs 1,299 crore in Q1. This was a miss when compared to Bloomberg consensus estimates of Rs 1,354 crore for the period. Ebitda margins slipped to 7.9% in Q1 versus 8.7% reported last year. Analysts’ estimate had pegged Ebitda margins at 8.2% for the period.
Avenue Supermarts CEO and MD Neville Noronha acknowledged the challenges the retailer was facing. “Gross margins are lower as compared to the same period in the previous year, due to continued competitive intensity within the FMCG space. Operating costs are higher due to our efforts on improving service levels, capacity building and inflation at entry level wages,” he said.
The rise in wage-related expenses reflects broader industry trends, experts said, with retailers like Vishal Mart, and V-Mart staring at a staff crunch amid high attrition levels within the retail sector. Over the past three years, quick commerce has seen a cumulative salary increase of about 17%, according to TeamLease, putting pressure on traditional rivals to catch up.
In Q1, Avenue Supermarts reported a 30.3% increase in its employee benefit expenses, rising to Rs 346.9 crore for the period. The company opened nine new stores during the quarter, taking the total store count to 424 as on June 30, 2025.