The financial report card for the July–September quarter (Q2 FY26) for Avenue supermarts q2 results., the operator of the massively popular retail chain DMart, arrived on Saturday, October 11, 2025, confirming a quarter defined by contrasting metrics,. Driven by robust consumption trends and aggressive store expansion, the company delivered strong top-line growth. However, this headline performance in revenue failed to translate fully to the bottom line, sparking intense scrutiny among investors and analysts who are now debating the stock’s short-term trajectory.
The core trending query, Avenue supermarts q2 results, centers on this paradoxical performance: high sales growth met with unexpectedly muted net profit, a phenomenon attributed directly to strategic operational costs designed to fuel DMart’s long-term dominance in the Indian retail market.
The company reported consolidated revenue growth of 15.4% year-on-year (YoY), reaching an impressive ₹16,676.30 crore for the quarter ended September 30, 2025,,. Yet, consolidated net profit (PAT) rose by a modest 3.8% YoY to ₹684.85 crore,, leading to a slight contraction in margins. This quarter reveals a critical strategic shift: DMart is prioritizing rapid footprint expansion and operational deepening over immediate margin optimization, positioning itself for a protracted retail war against intensifying competition.
The Q2 Financial Scorecard: Robust Top-Line, Shrinking Margins
Avenue supermarts q2 results’s revenue expansion remained consistent, powered primarily by its long-standing strategy of ‘Everyday Low Cost/Everyday Low Price’ (EDLC/EDLP), which drives foot traffic and customer loyalty. However, the cost of implementing this strategy, particularly amid expansion, was clearly reflected in the profitability ratios,:
Avenue Supermarts Consolidated Financial Highlights (Q2 FY26
| Metric | Q2 FY26 Value | YoY Change | Observation |
| Revenue from Operations | ₹16,676.30 crore | +15.4% | Strong growth, driven by new stores and older store stability. |
| Net Profit (PAT) | ₹684.85 crore | +3.8% | Muted growth, reflecting increased operational expenses. |
| EBITDA Margin | 7.3% | Contracted (from 7.6% in Q2 FY25) | Margin pressure due to higher costs and discounts. |
| PAT Margin | 4.1% | Contracted (from 4.6% in Q2 FY25) | Dip in bottom-line efficiency. |
| Same-Store Sales Growth (SSSG) | 6.8% | Steady YoY increase | Older stores continue to deliver resilient volume growth. |
The dip in net profit margin from 4.6% in the previous fiscal’s Q2 to 4.1% in Q2 FY26 confirms that the robust revenue growth came at a cost,. While sales volumes were high, the concurrent surge in operational expenditure a key strategic outlay weighed heavily on the profit after tax, aligning with management’s stated focus on long-term market share over short-term margin goals,
Footprint Expansion and SSSG Resilience
Avenue supermarts q2 results’s physical footprint expansion remains the primary structural growth driver for Avenue Supermarts. During the July–September quarter, the company maintained its aggressive rollout pace by adding eight new stores, bringing its total nationwide store count to 432 as of September 30, 2025,. The company’s long-term plans aim to accelerate this store opening rate from the current 40–50 annual stores to potentially 60–70 within the next two years, enhancing processes and teams to meet this ambitious target. This strategy is crucial for tapping into underpenetrated markets, especially in North and East India.
Equally critical to the growth narrative is the sustained performance of its existing assets: Same-Store Sales Growth (SSSG) for stores older than two years clocked in at 6.8% YoY,. This consistent growth demonstrates that DMart’s fundamental EDLC/EDLP model maintains strong customer loyalty and resilient volume growth across mature markets, proving its effectiveness against intensifying competition,.
Decoding the Margin Contraction: The Rising Cost of Doing Business
The primary explanation for the muted profit lies in the sharp rise in total expenses, which jumped 16% YoY to ₹15,751.08 crore,. This increase is strategically calculated, representing major investments in human capital and market consolidation.
The most acute pressure point was the Employee Benefit Expenses, which surged by a significant 32% YoY to ₹376.83 crore,. This substantial rise reflects the cost of staffing eight new physical stores, the addition of new fulfillment centers for e-commerce, and general salary adjustments required to maintain operational scale,. This investment in staff and infrastructure is considered a necessary upfront cost to support future volume and defend against aggressive rivals.
E-Commerce Consolidation
DMart also undertook a strategic consolidation of its e-commerce service, DMart Ready. While the company ceased operations in five smaller cities (Amritsar, Belgavi, Bhilai, Chandigarh, and Ghaziabad), it concurrently added 10 new fulfillment centers across existing major markets,. This move signals a deliberate shift toward deepening penetration in high-value urban clusters, focusing resources where the customer density and e-commerce viability are highest,. The company is now present across 19 cities.
Strategic Direction and Analyst Outlook: Long-Term Compounding
The Avenue supermarts q2 results are notable as they coincide with a transition in DMart’s top leadership, with Anshul Asawa taking charge as the CEO-Designate, following the decision of Neville Noronha to step down in January 2026,.
The management reiterated its commitment to the low-cost model, confirming that the company passed on the benefit of recent GST reforms to customers by reducing prices wherever applicable,. This reinforces DMart’s core EDLC/EDLP strategy, which is critical for driving bill cuts and customer loyalty, key drivers for its long-term dominance as India’s most valuable listed retailer,.
Analyst Verdict and Valuation Challenge
Following the results, brokerage analysts maintained a cautious but fundamentally positive outlook, reflected in a general “Neutral” consensus rating for the stock,.
The subdued PAT growth and high existing valuation remain the primary concerns. DMart is expensive, based on its Price-to-Earnings (P/E) ratio of approximately 103.9x, which is significantly higher than the Indian Consumer Retailing industry average (21.4x),.
- Brokerages like Goldman Sachs maintained a “Sell” recommendation, cutting their price target to ₹3,370, citing weaker-than-expected sales growth.
- JPMorgan maintained a “Neutral” rating with a target of ₹4,350, noting that the growth execution would likely weigh on the stock price in the near term.
The average 12-month price target remains around ₹4,250,. Despite these short-term concerns, analysts largely view DMart as a structurally sound business, debt-free, and poised for a strong compounding trajectory,. The Avenue supermarts q2 results margin pressure, therefore, should be interpreted not as a failure, but as a temporary, strategic cost of ensuring long-term retail dominance against the intensifying competitive landscape. DMart’s focus on operational superiority and market penetration confirms its commitment to securing a greater share of India’s fast-growing organized grocery retail market in the coming years.