DMart's margin slips as costs outpace sales growth
Revenue rose +17.80% YoY, but higher interest and depreciation limited net profit growth to +8.49%.
Filed 10 Oct 2026, 15:22 IST · after market close · Avenue Supermarts Ltd (DMART)
Key takeaways
- Consolidated revenue grew +17.80% YoY, but expenses grew +18.03%, narrowing operating margin by 0.19 percentage points.
- Net profit rose only +8.49% YoY as interest expense increased +82.78%, while other income contributed just 1.32% of profit before tax.
- Operating margin fell 0.89 percentage points QoQ to 7.09% after the Q1FY27 rebound, with expenses growing +5.53% against revenue growth of +4.52%.
Price around the results
Sales growth did not translate into equal profit growth
Avenue Supermarts reported consolidated revenue growth of +17.80% YoY, but expenses increased slightly faster at +18.03%. That left operating profit growth at +14.77%, below revenue growth, while net profit rose +8.49% after interest and depreciation costs increased. Sequentially, revenue grew +4.52%, but expenses grew +5.53%, pulling operating profit down -7.10% and net profit down -13.65%.
Interest and depreciation added to the margin pressure
Operating margin narrowed 0.19 percentage points YoY and 0.89 percentage points QoQ because costs grew faster than revenue in both comparisons. Interest expense rose +82.78% YoY and +17.72% QoQ, while depreciation increased +25.36% YoY and +10.44% QoQ. The tax rate was broadly unchanged YoY, but rose 0.23 percentage points QoQ, so lower taxes did not materially support the sequential result.
The quarterly margin path remains uneven
Operating margin moved from 8.08% in Q3FY26 to 6.85% in Q4FY26, rebounded to 7.98% in Q1FY27 and then slipped to 7.09% in Q2FY27. The latest decline means the Q1 recovery has not yet become a sustained upward trend. Other income was only 1.32% of profit before tax and fell -47.52% QoQ, limiting its influence on reported profit quality.
No immediate market reaction is available yet
The consolidated results were filed after market close, so there is no post-results move to assess yet. In the eight recent result reactions, the stock rose once and fell seven times, with a median absolute move of 2.73%, providing a generally negative historical response pattern.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹19,644 cr | ₹18,795 cr | +4.52% | +17.80% |
| Other income | ₹14 cr | ₹26 cr | -47.52% | -30.86% |
| Expenses | ₹18,251 cr | ₹17,295 cr | +5.53% | +18.03% |
| Operating profit | ₹1,393 cr | ₹1,499 cr | -7.10% | +14.77% |
| Operating margin (%) | 7.09% | 7.98% | — | — |
| Interest | ₹64 cr | ₹54 cr | +17.72% | +82.78% |
| Depreciation | ₹318 cr | ₹288 cr | +10.44% | +25.36% |
| Profit before tax | ₹1,025 cr | ₹1,183 cr | -13.38% | +8.47% |
| Tax | ₹282 cr | ₹323 cr | -12.66% | +8.43% |
| Net profit | ₹743 cr | ₹860 cr | -13.65% | +8.49% |
| EPS (₹) | ₹11.40 | ₹13.20 | -13.64% | +8.26% |
What to watch
- Whether operating margin holds above 7.09% after the 0.89 percentage-point QoQ decline.
- Whether expense growth moves below revenue growth after +18.03% versus +17.80% YoY.
- Whether interest growth moderates after increasing +82.78% YoY.