Sales grew faster than profit

Avenue Supermarts published results on October 10, 2026 for the second quarter of fiscal 2027, which ended September 30. Consolidated revenue was ₹196.44 billion (₹19,644 crore), up 17.8% year over year; net profit rose from ₹6.85 billion to ₹7.43 billion, or 8.5%. One crore equals 10 million rupees. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Earnings before interest, taxes, depreciation and amortisation (EBITDA) reached ₹13.93 billion, up from ₹12.14 billion a year earlier, but the margin narrowed from 7.3% to 7.1%. The net profit margin also declined, from 4.1% to 3.8%. Higher absolute profit therefore did not mean better profitability on each rupee of sales. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

The parent company's standalone results, which mainly reflect DMart stores, showed ₹192.06 billion in revenue, ₹14.03 billion in EBITDA and ₹8.04 billion in net profit. These figures cannot be added to the consolidated numbers: subsidiaries and group adjustments are already included in the consolidated accounts. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Mature stores revived, but network expansion needs a careful reading

Management said sales at DMart stores operating for at least two years grew 9.5% in the quarter, compared with 6.8% a year earlier. This is a cleaner signal of the mature network's momentum than total revenue, but the release does not disclose the sales base for those stores or separate the contribution of prices from physical volume. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Fifteen stores opened during the quarter, bringing the total to 518 at September 30. That count includes one Navi Mumbai location temporarily closed to customers for reconstruction. The network had 21.4 million square feet of retail business area, so store openings alone do not reveal the productivity of new space. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

The company attributed a marginal rise in operating expenses to entry-level wage inflation and reiterated its everyday low cost–everyday low price strategy. For DMart Ready, management stated a focus on operational efficiency and customer experience in existing cities, but disclosed no separate sales, loss or timetable for the online business to become profitable. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Expert commentary

The quarter's central signal is the gap between sales and profit growth. Consolidated revenue rose 17.8%, EBITDA 14.7% and net profit 8.5%. That sequence suggests that costs and weaker conversion of revenue into earnings absorbed part of the additional turnover. The margin decline is small in percentage points, but even a 0.2-point EBITDA movement matters in low-margin grocery retail with turnover close to ₹200 billion. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Mature-store sales growth accelerating to 9.5% looks stronger than a year earlier, yet the measure does not show how much came from prices, customer traffic or basket size. In an inflationary environment, nominal revenue can rise without a comparable increase in physical volume. Investors and suppliers should therefore compare future mature-store data with consumer inflation and, if disclosed, transaction counts and units per basket. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Opening 15 stores supports total growth but creates a delayed burden: new locations require inventory, staff and time to reach planned sales. The entry-level wage inflation cited by the company raises costs but may also reduce employee turnover. Public data are insufficient to determine whether retention benefits outweigh the larger wage bill; future expense and store-productivity trends will offer better evidence. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

An everyday-low-price strategy can reinforce customer trust, especially when food inflation makes discount claims more consequential. It also limits how quickly higher purchasing and labour costs can be passed through. DMart's advantage depends on buying scale, inventory turns and cost discipline; if any of those weaken, the price promise will conflict more sharply with margins. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026]

DMart Ready remains an important but opaque part of the picture. The company speaks about efficiency and customer experience but publishes no separate economics for the service. Without order frequency, picking and delivery cost, average order value and repeat-purchase data, it is not possible to conclude that the online channel is nearing sustainable profitability. Its role may also be defensive—retaining customers who might otherwise switch to rapid-delivery services. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Over the next two quarters, the main checks are EBITDA margin, sales growth at stores older than two years, new-space productivity and any separate DMart Ready metrics. A durable scenario requires strong mature-store growth without another material margin contraction. If revenue keeps outpacing profit, the market will have evidence of network scale, but not proof that its economics are improving. [1 · Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026] [3 · Financial Express · analysis of DMart's quarterly results, October 10, 2026]

Sources

  1. Avenue Supermarts / NSE · fiscal 2027 second-quarter and first-half results, October 10, 2026 — Primary document covering consolidated and standalone results, margins, mature-store growth, openings and management comments.
  2. DMart · official website — Official source on the retail chain and the brand's product range.
  3. Financial Express · analysis of DMart's quarterly results, October 10, 2026 — Independent cross-check of the key consolidated and standalone figures, store count and statement on operating expenses.