DMart expands sequential margin but trails sector median by 6.56 points
Revenue grew 14.88% YoY with expenses broadly in line, while interest costs rose 85.26% and the stock fell 2.13% after the results.
Filed 11 Jul 2026, 15:48 IST · after market close · Avenue Supermarts Ltd (DMART)
Key takeaways
- Consolidated net profit rose 11.34% YoY as revenue grew 14.88% and expenses increased 14.84%.
- Operating margin improved 1.13 percentage points sequentially to 7.98%, but remained 6.56 percentage points below the sector median.
- The stock fell 2.13% on the first session after results, consistent with its history of six declines in eight result reactions.
Price around the results
Revenue growth outpaced the last quarter
Consolidated revenue increased 14.88% YoY and 6.28% QoQ, with operating profit rising 15.42% YoY and 23.86% QoQ. Sequentially, expenses grew 4.99%, slower than revenue, which lifted operating margin by 1.13 percentage points. On a YoY basis, the near-identical 14.84% expense growth kept the margin change to just 0.04 percentage points.
Interest costs were the main profit-quality pressure
Interest expense increased 85.26% YoY and 32.49% QoQ, while depreciation rose 24.17% YoY. That limited the conversion of operating profit into pre-tax profit, which grew 11.88% YoY against the 15.42% increase in operating profit. Other income was only 2.18% of pre-tax profit, so reported earnings were not materially dependent on it; the tax rate was also 0.35 percentage points higher YoY.
Margin recovered from Q4 but remains below peers
Operating margin rose from 6.85% in Q4FY26 to 7.98% in Q1FY27, reversing the previous quarter's decline, but remained below the 8.08% recorded in Q3FY26. Among 26 Consumer Discretionary peers that had reported, the sector median operating margin was 14.54%, placing Avenue Supermarts 6.56 percentage points below that level and eighth from the bottom.
The post-result fall was within its usual range
The stock declined 2.13% on the first session after the results, after opening down 3.21%, and was down 2.59% by the fifth session. The direction was typical: six of the last eight result reactions were negative, while the median absolute move was 2.73%. The initial fall was smaller than that historical median.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹18,795 cr | ₹17,684 cr | +6.28% | +14.88% |
| Other income | ₹26 cr | ₹18 cr | +41.88% | +32.68% |
| Expenses | ₹17,295 cr | ₹16,473 cr | +4.99% | +14.84% |
| Operating profit | ₹1,499 cr | ₹1,211 cr | +23.86% | +15.42% |
| Operating margin (%) | 7.98% | 6.85% | — | — |
| Interest | ₹54 cr | ₹41 cr | +32.49% | +85.26% |
| Depreciation | ₹288 cr | ₹284 cr | +1.46% | +24.17% |
| Profit before tax | ₹1,183 cr | ₹904 cr | +30.85% | +11.88% |
| Tax | ₹323 cr | ₹248 cr | +30.25% | +13.36% |
| Net profit | ₹860 cr | ₹656 cr | +31.08% | +11.34% |
| EPS (₹) | ₹13.20 | ₹10.09 | +30.82% | +11.11% |
Operating margin of 7.98% compares with a Consumer Discretionary sector median of 14.54% across 26 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.13% | -2.15% |
| Next session | -4.05% | — |
| 5 sessions | -2.59% | -2.72% |
Volume on the results session was 3.33× its 20-day average.
What to watch
- Whether operating margin holds above 7.98% after the sequential recovery.
- Whether interest-cost growth moderates from 85.26% YoY.
- Whether revenue growth remains above the 14.88% YoY pace.