Avenue Supermarts, which operates the retail chain DMart, reported a nearly 4% year-on-year rise in consolidated net profit to ₹685 crore for the September quarter, while revenue grew 15.5% year-on-year to ₹16,676 crore. The company announced its Q2FY26 results on Saturday.
While Q2 like-for-like growth (same-store sales growth/SSG) of 6.8% was higher than the 5.5% recorded in the same quarter last year, sequentially the retailer’s SSG declined by 30 basis points from 7.1% in the June quarter. One basis point is equal to one-hundredth of a percentage point.
Q2 revenue growth was also slightly below the 16% average seen over the past three years, analysts noted. The company added eight new stores in Q2FY26, taking its total store count to 432.
Earnings before interest, tax, depreciation and amortisation (Ebitda) increased 11% year-on-year to ₹1,214 crore. However, Ebitda margins contracted by 30 basis points to 7.3% due to higher other expenses associated with the company’s growing retail footprint.
Avenue Supermarts has said that it will double down on store expansion, as it seeks to counter heightened competition from online and offline retailers.
In the first half of FY26, the company opened 14 new stores nationwide, including a key entry into Agra — marking its first major expansion in Uttar Pradesh, India’s most populous state. It has since added more stores in UP, which remains a focus market.
The retailer has also consolidated its e-commerce footprint by deepening its presence in major metro cities and ceasing operations in five smaller cities — Amritsar, Belagavi, Bhilai, Chandigarh and Ghaziabad. As a result, its online presence now spans 19 cities, down from 24 earlier.
Analysts remain divided on the stock. Brokerage UBS has maintained a “buy” rating, while HSBC has a “reduce” rating, stating that “store additions cannot compensate for muted SSG”. HSBC has set a price target of ₹3,700 on Avenue Supermarts shares.
Goldman Sachs has maintained a “sell” recommendation, cutting its price target to ₹3,370 from ₹3,450, citing weaker-than-expected Q2 sales growth despite a low base for DMart. Meanwhile, JPMorgan has kept a “neutral” rating with a price target of ₹4,350, noting that “the revenue growth during the quarter will weigh on the near-term stock price”.
Shares of Avenue Supermarts ended 0.3% higher on Friday at ₹4,319.70 apiece. The stock is down 6% in the last month, but has gained over 20% so far in 2025.