DMart profit rises YoY, but margin drop triggers 4.57% fall
Revenue grew faster than expenses YoY, but the sequential margin decline and 116.09% rise in interest weighed on the market response.
Filed 02 May 2026, 17:15 IST · after market close · Avenue Supermarts Ltd (DMART)
Key takeaways
- Consolidated Q4FY26 net profit rose 19.18% YoY to Rs 656.42 cr, but fell 23.30% QoQ as operating margin dropped 1.23 percentage points.
- Revenue grew 18.91% YoY against 18.37% expense growth, lifting operating margin by 0.43 percentage points to 6.85%.
- The stock fell 4.57% on the first trading day, versus a 1.3% median absolute move after the last eight results.
Price around the results
YoY profit growth did not carry into sequential momentum
Avenue Supermarts reported consolidated Q4FY26 net profit growth of 19.18% YoY, supported by an 18.91% rise in revenue and a 26.75% increase in operating profit. Sequentially, revenue declined 2.30% and net profit fell 23.30%, with operating profit down 17.28%.
Costs were contained YoY, but the Q4 margin reset was sharp
Expenses grew 18.37% YoY, slower than revenue, which widened operating margin by 0.43 percentage points. The sequential picture was weaker: expenses fell only 0.99% against a 2.30% revenue decline, so margin narrowed 1.23 percentage points from Q3FY26. Interest expense rose 116.09% YoY, while other income contributed only 2.01% of pre-tax profit; the higher 27.40% tax rate also limited the conversion of pre-tax growth into net profit.
Q4 margin fell below the Consumer Discretionary peer median
Operating margin had reached 8.08% in Q3FY26 before falling to 6.85% in Q4FY26, reversing the previous quarter's improvement rather than marking a third straight decline. Against 93 Consumer Discretionary peers that had reported, DMart's margin was 7.96 percentage points below the 14.81% median and ranked 11th from the bottom.
The market reaction was unusually negative for DMart
The results were filed after market close, and the stock fell 4.57% on the first trading day after the filing, with a 1.72 times volume ratio. That move was materially larger than the 1.3% median absolute reaction across the last eight results, during which the stock rose twice and fell six times. The decline extended to 10.66% after 15 trading days.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹17,684 cr | ₹18,101 cr | -2.30% | +18.91% |
| Other income | ₹18 cr | ₹17 cr | +7.32% | -27.47% |
| Expenses | ₹16,473 cr | ₹16,638 cr | -0.99% | +18.37% |
| Operating profit | ₹1,211 cr | ₹1,463 cr | -17.28% | +26.75% |
| Operating margin (%) | 6.85% | 8.08% | — | — |
| Interest | ₹41 cr | ₹37 cr | +11.27% | +116.09% |
| Depreciation | ₹284 cr | ₹268 cr | +5.69% | +17.73% |
| Profit before tax | ₹904 cr | ₹1,175 cr | -23.06% | +25.53% |
| Tax | ₹248 cr | ₹319 cr | -22.44% | +46.16% |
| Net profit | ₹656 cr | ₹856 cr | -23.30% | +19.18% |
| EPS (₹) | ₹10.09 | ₹13.15 | -23.27% | +19.13% |
Operating margin of 6.85% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.57% | -5.07% |
| Next session | -4.95% | — |
| 5 sessions | -4.28% | -3.53% |
| 15 sessions | -10.66% | — |
| 30 sessions | -8.39% | — |
Volume on the results session was 1.72× its 20-day average.
What to watch
- Whether operating margin recovers from 6.85% after the 1.23-percentage-point sequential decline.
- Whether expenses continue to grow slower than revenue after the 18.37% versus 18.91% YoY comparison.
- Whether interest growth moderates from 116.09% YoY.