Avenue Supermarts Ltd, which runs the favored retail chain DMart, kicked off FY26 with a blended set of numbers. Whereas income progress remained wholesome, due to aggressive retailer growth, revenue margins contracted as a result of excessive working prices and pricing strain within the FMCG phase—inflicting internet revenue to fall wanting analyst expectations.
Income rises in step with estimates
DMart reported standalone income of Rs 15,932 crore for Q1FY26, up 16 per cent from Rs 13,944 crore in Q1FY25. This was throughout the Avenue’s forecast vary of Rs 15,932–16,348 crore. The retailer opened 9 new shops in the course of the quarter, taking its complete retailer depend to 424. Similar-store gross sales remained regular, with gross sales per sq. foot anticipated at Rs 9,200—marking a 2 per cent YoY enchancment.
PAT beneath estimates regardless of operational good points
The corporate’s standalone revenue after tax (PAT) stood at Rs 830 crore, up a marginal 2 per cent YoY from Rs 812 crore. This missed the extra optimistic expectations from HSBC (Rs 892 crore) and JM Monetary (Rs 869 crore). The reported PAT was, nevertheless, in step with Axis Securities’ conservative estimate of Rs 817 crore. On a sequential foundation, revenue progress was strong, aided by improved working leverage and festive pre-stocking.
Margin strain continues
Standalone EBITDA got here in at Rs 1,313 crore, up from Rs 1,221 crore YoY, registering a 7.5 per cent rise. Nevertheless, the EBITDA margin slipped to eight.2 per cent from 8.9 per cent in Q1FY25. On a consolidated foundation, the margin dropped additional to 7.9 per cent, reflecting the influence of upper operational bills, elevated entry-level wages, and compressed gross margins as a result of fierce value wars in FMCG.
The corporate famous that deflation in staples and non-food objects shaved off 100–150 bps from gross sales progress. As well as, competitors intensified in each city and tier-2 markets.
Inventory response
Shares of DMart closed 2 per cent decrease on Friday at Rs 4,069 on the NSE, reflecting investor considerations over the corporate’s narrowing profitability regardless of regular topline efficiency.
