Avenue Supermarts Q3 Results: Profit Surges 17% to ₹856 Crore

Introduction

Avenue Supermarts Ltd., the parent company of the popular retail chain DMart, announced a strong financial performance for the third quarter ending December 31. The company reported double-digit growth across key metrics, with net profit rising by 17% year-on-year. This robust performance comes alongside a significant leadership transition, as the tenure of Managing Director and CEO Ignatius Navil Noronha is set to conclude.

Detailed Financial Performance

For the third quarter, Avenue Supermarts posted a consolidated net profit of ₹856 crore, a significant 17% increase from the ₹733 crore reported in the same period last year. This growth highlights the company's ability to manage costs and improve profitability effectively. Revenue from operations also saw a healthy increase, climbing 13.3% year-on-year to ₹18,101 crore from ₹15,972 crore in the corresponding quarter of the previous fiscal year. The company's standalone revenue for the quarter stood at ₹17,612 crore, marking a 13% year-on-year growth.

Operational Efficiency and Margin Improvement

A key highlight of the quarter was the improvement in operational earnings. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew by a substantial 20.2% to ₹1,463 crore, compared to ₹1,217.5 crore a year ago. Consequently, the EBITDA margin expanded to 8.1% from 7.7% in the year-ago period. This improvement in margins suggests better operational leverage and cost control measures, contributing directly to the higher net profit.

Store Expansion and Sales Growth Analysis

DMart continued its network expansion by opening 10 new stores during the quarter, bringing its total store count to 442 as of December 31, 2025. This expansion increased the total retail area by 13.7% year-on-year to 18.3 million square feet. However, the company faced some headwinds that tempered its top-line growth. Revenue growth was partially impacted by deflation in the prices of staples, a key product category for the retailer. This led to a moderation in like-for-like (LFL) sales growth, which measures revenue from stores operational for at least 24 months. LFL growth stood at 5.6% in Q3, down from 8.3% in the same quarter last year. Consequently, revenue per square foot saw a marginal decline to ₹9,290 from ₹9,317 a year ago.

Leadership Transition

In a significant corporate announcement, Avenue Supermarts confirmed that the term of its long-serving Managing Director and CEO, Ignatius Navil Noronha, will end on January 31. The company has appointed Anshul Asawa as the new MD and CEO for a term of three years, starting April 1. This transition marks a new chapter for the retail giant as it navigates the next phase of its growth.

Comparative Performance

To put the Q3 results in perspective, the preceding quarter (Q2 FY26) saw the company report a revenue growth of 15.5% year-on-year to ₹16,676.3 crore. However, net profit growth in that quarter was more modest, at 3.9% year-on-year, amounting to ₹685 crore. The sharp acceleration in profit growth during Q3 indicates a significant improvement in profitability over the previous quarter.

Market Reaction

Investors reacted positively but cautiously to the earnings report. The shares of the Mumbai-based retailer closed the trading session on Friday with a modest gain of 0.45%. The market will be closely watching how the new leadership steers the company and addresses challenges such as moderating LFL growth and external factors like commodity price deflation.

Conclusion

Avenue Supermarts delivered a commendable performance in the third quarter, marked by strong profit growth and margin expansion despite a challenging operating environment. The continued store expansion underscores its long-term growth strategy. The upcoming leadership change will be a pivotal event, with stakeholders keen to see how the new management builds on the company's solid foundation to drive future growth.