India’s organised retailers kicked off FY27 on a strong note, with most listed companies reporting healthy double-digit revenue growth in the June quarter. However, beneath the robust top-line performance lies a more nuanced picture, with profitability and margins diverging depending on business models, expansion strategies and investment priorities.
The first-quarter earnings of Reliance Retail, Avenue Supermarts (DMart), V-Mart Retail, Vishal Mega Mart, Shoppers Stop and Arvind Fashions point to a common trend: consumer demand remains resilient across value, premium and fashion segments, but retailers are increasingly balancing growth with profitability.
The trend mirrors findings from business surveys by the Retailers Association of India (RAI), which showed demand remained stable during the April-June quarter despite a cautious consumer spending environment triggered by the West Asia conflict.
“While the intent to spend remains intact among consumers, they are highly value-conscious. Retailers are adapting with sharp value strategies as they prepare for the upcoming festive season,” said Kumar Rajagopalan, executive director and chief executive officer of RAI.
On the revenue front, nearly every retailer delivered double-digit growth. V-Mart led the pack, with revenue rising 23% year-on-year to Rs 1,089 crore, aided by strong footfalls, 9% same-store sales growth and 15 new stores. Vishal Mega Mart followed with an 18.7% increase to Rs 3,727 crore, supported by 10% same-store sales growth and 24 net store additions.
Arvind Fashions posted a 15.5% rise in revenue to Rs 1,279 crore, driven by its direct-to-consumer and online businesses, which now contribute 62% of sales. Avenue Supermarts reported a 14.9% increase in revenue to Rs 18,795 crore, although same-store sales growth eased to 5.5% in Q1 from 7.1% a year earlier. Shoppers Stop’s topline grew 11.2% to Rs 1,291 crore as demand for beauty products and premium apparel remained healthy. Reliance Retail, India’s largest retailer, reported net revenue of Rs 79,745 crore, reflecting continued momentum across categories.
Value Retailers Lead
The contrast becomes sharper at the profitability level. Value retailers continued to demonstrate operating leverage, converting higher sales into stronger earnings. V-Mart’s net profit surged 40.5% to Rs 47.2 crore, while Vishal Mega Mart’s rose 25.6% to Rs 259 crore. Avenue Supermarts reported an 11.3% increase in net profit to Rs 861 crore, while maintaining earnings before interest tax depreciation and amortisation (Ebitda) margin of 8%.
Shoppers Stop also narrowed its net loss to Rs 14.3 crore, helped by premiumisation, tighter inventory management and continued expansion of its beauty business.
Reliance Retail and Arvind Fashions, however, reflected the cost of investing for future growth. Reliance Retail’s net profit fell 14.1% year-on-year to Rs 2,805 crore, while Ebitda declined 1.8% and Ebitda margin contracted 80 basis points to 7.4%. The company attributed the pressure to investments in quick commerce, hyperlocal delivery, omnichannel expansion and digital infrastructure, underscoring its willingness to sacrifice near-term profitability to strengthen its position in fast-growing retail formats.
Arvind Fashions also reported a mixed quarter. Net profit declined 23.8% to Rs 10 crore, largely because of lower other income, even as Ebitda grew 20% and margin expanded 50 basis points to 12.5%. Vice-chairman Kulin Lalbhai said the company will step up marketing investments, expand retail space and strengthen its brands while managing raw material costs. It expects Ebitda margins to improve by another 40-50 basis points in FY27 and is targeting around 15% revenue growth.
According to analysts at Motilal Oswal, the quarter reinforced a growing divide within organised retail. Companies with mature store networks and disciplined cost control are converting revenue growth into stronger earnings, while those investing aggressively in new growth engines are accepting short-term margin compression. With the festive season approaching, investors will be watching whether retailers can sustain sales momentum without compromising profitability.
