Avenue Supermarts shares fall over 2%; here is what global investment firms say on Q2 earnings

Shares of DMart retail chain operator, Avenue Supermarts, were trading around 2% lower on the BSE on Monday, October 13, after the company reported September quarter earnings on Saturday.

Avenue Supermarts shares dropped as much as 2.05% to hit an intraday low of ₹4,232.

The country's leading retail chain operator on Saturday reported a consolidated net profit of ₹685 crore in the second quarter of the current financial year, marking an increase of 4% from ₹660 crore in the same period last year.

Billionaire Radhakishan Damani-backed DMart reported stable operational performance as its operating profit, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA), rose 11% to ₹1,213 crore, but its operating profit margins contracted by 30 basis points to 7.28%.

EBITDA in the first half of the current financial year (H1FY26) stood at ₹2,513 crore, as compared to ₹2,315 crore during H1FY25. EBITDA margin stood at 7.6% in H1FY26 as compared to 8.1% in H1FY25.

The company's profit margin stood at 4.1% in Q2FY26 as compared to 4.6% in Q2FY25.

In the first half of the current fiscal year, the share of revenue from the food business improved to 57.01% from 56.4%. Share of revenue from FMCG business contracted slightly to 19.65% from 20.15%, and share of revenue from general merchandise & apparel business came in at 23.34%.

The company in the first half of the current fiscal year added 17 stores, taking the total store count to 432.

What global investment firms say on DMart’s Q2 earnings

As per Citi’s estimates, operating profit, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA), and profit after tax (PAT) grew 11% and 5% year-on-year, respectively — coming in 2% and 4% below its estimates. Revenue growth stood at 15% YoY, marginally lower than expectations.

Same-store sales growth (SSG) moderated to 6.8% from 7.1% in Q1FY26 and 8.1% in Q4FY25, Citi noted.

CLSA attributed the revenue slowdown to adverse weather, price deflation in private-label products and lower sales density at new stores in emerging geographies.

A sharp 33% YoY rise in employee costs drove the entire 4.6% miss on EBITDA as DMart ramped up hiring to accelerate expansion. PAT was impacted by higher finance costs due to short-term bridge loans taken for store additions, CLSA said.

Morgan Stanley maintained a broad miss across key metrics. Revenue, EBITDA, and PAT rose 15%, 11%, and 4% YoY, respectively—but EBITDA and PAT were 7% and 14% below their estimates. Like-for-like growth of 6.8% was the lowest in 10 quarters, excluding Q2FY25. The investment firm also noted a contraction in DMart Ready’s footprint to 19 cities from 25 in FY25.

Nuvama Institutional Equities said that while margin pressures are easing, they continue to persist. Top-line growth remains healthy, and the company’s CWIP (capital work-in-progress) at ₹1,500 crore — the highest ever — signals a strong pipeline of store additions over the next six months.

As of 11:10 am, Avenue Supermarts shares traded 1.72% lower at ₹4,246.