DMart Q2 FY27: Profit +8.5%, revenue Rs 19,644 cr YoY

What Avenue Supermarts reported for Q2 FY27

Avenue Supermarts Ltd, the operator of the DMart retail chain, reported a steady rise in earnings for the quarter ended September 30, 2026 (Q2 FY27), even as profitability ratios weakened. Consolidated net profit increased 8.5% year-on-year to Rs 742.98 crore. Consolidated revenue from operations grew faster, rising 17.8% year-on-year to Rs 19,644.01 crore. The company also expanded its footprint, adding 15 stores during the quarter. That took its total store count to 518 as of September 30, 2026. Despite the profit growth, the stock reaction was negative, reflecting investor focus on margin pressure.

Headline numbers: growth led by revenue, not margins

Revenue growth outpaced profit growth in Q2 FY27, indicating that costs rose broadly in line with, or faster than, sales. Consolidated EBITDA increased 14.7% year-on-year to Rs 1,393 crore from Rs 1,214 crore in the year-ago quarter. But EBITDA margin narrowed to 7.1% from 7.3% a year earlier. Profit after tax (PAT) margin also declined to 3.8% from 4.1%. The company attributed margin pressure to entry-level wage inflation. The combination of strong top-line growth and modest margin compression set the tone for the results.

Expenses rose faster than last year

Avenue Supermarts reported consolidated total expenses of Rs 18,632.70 crore in Q2 FY27, up 18.3% year-on-year from Rs 15,751.08 crore. This expenses growth was slightly higher than the 17.8% growth in revenue from operations, which helps explain the decline in operating and PAT margins. The company also reported total income (including other income) of Rs 19,657.54 crore, up 17.73% year-on-year. The gap between revenue growth and expenses growth was small, but enough to compress margins in a business where investors closely track operating efficiency.

Store additions and operating footprint

During Q2 FY27, Avenue Supermarts opened 15 new stores. The total store count reached 518 as of September 30, 2026, reinforcing the company’s continued focus on physical retail expansion. For the first half of FY27, the company added 18 stores, implying that three stores were added in Q1 FY27. Store expansion is a key driver of revenue growth for grocery and value retail, but it also brings ramp-up costs, staffing needs, and other overheads. With the company highlighting entry-level wage inflation, the cost of operating a growing store network remained in focus.

Like-for-like commentary from management

Commenting on DMart’s brick-and-mortar performance, Managing Director and CEO Anshul Asawa said stores that were at least two years old recorded 9.5% growth in Q2 FY27. In the year-ago quarter, comparable growth for stores at least two years old was 6.8%. This comparison suggests an improvement in underlying store productivity for mature locations, alongside the contribution from newer stores. The metric matters because it helps investors separate growth coming from new store openings versus growth in existing stores. However, even with improved mature-store growth, margin compression remained the key issue highlighted in the quarter.

Consolidated performance snapshot

Standalone numbers: higher PAT, similar margin theme

On a standalone basis for Q2 FY27, Avenue Supermarts reported total revenue of Rs 19,206.18 crore, up 18.4% year-on-year from Rs 16,218.79 crore (also reported as Rs 16,219 crore). Standalone EBITDA increased 14.1% year-on-year to Rs 1,403 crore from Rs 1,230 crore. Standalone net profit rose 7.6% year-on-year to Rs 803.60 crore from Rs 746.55 crore. Basic EPS increased to Rs 12.32 in Q2 FY27 from Rs 11.47 in Q2 FY26. The standalone numbers show the same pattern as consolidated results: strong revenue growth, slower profit growth.

H1 FY27 update: growth continued into the first half

For the first half of FY27, consolidated revenue from operations increased 16.4% year-on-year to Rs 38,438.54 crore from Rs 33,036 crore. Consolidated total income for H1 FY27 was reported at Rs 38,477.85 crore, up 16.47% year-on-year. On the standalone side, H1 FY27 revenue was Rs 37,550 crore, up 16.8% year-on-year. H1 FY27 standalone EBITDA rose 15.2% year-on-year to Rs 2,930 crore, while standalone PAT increased 10.3% year-on-year to Rs 1,739 crore. Basic EPS for H1 FY27 was Rs 26.67.

Market reaction: shares fell despite profit growth

Avenue Supermarts shares fell 3.3% even after the company reported higher profit and revenue for Q2 FY27. The negative reaction aligned with the margin commentary and the reported decline in EBITDA and PAT margins. The stock also fell on October 12 to a fresh 52-week low, based on the information provided. The results were declared on October 10, 2026, and the market’s subsequent move suggested that investors were weighing cost inflation, especially at the entry level, against the pace of sales growth.

Why the quarter matters for retail investors

For DMart, revenue growth and store expansion remained intact, with Q2 FY27 revenue from operations at Rs 19,644.01 crore and 15 net new stores in the quarter. At the same time, expenses growth of 18.3% and the reduction in EBITDA margin to 7.1% highlighted the sensitivity of the model to operating costs. The reported improvement in growth for stores older than two years to 9.5% provides a positive data point on demand and execution at mature stores. But the market response showed that near-term profitability ratios are closely tracked, particularly when cost inflation is visible in reported margins.

Conclusion

Avenue Supermarts delivered strong year-on-year revenue growth in Q2 FY27 and expanded its store network to 518 outlets, while profit rose at a slower pace. The key takeaway from the quarter was margin pressure alongside higher expenses. Investors will likely watch how wage inflation and operating costs evolve in upcoming quarters, along with the company’s pace of store additions and performance of mature stores.