DMart Posts Muted Profit in Q2 FY26 Despite Growth in Legacy Stores; Cost Pressures Persist

India’s leading value retail chain DMart, operated by Avenue Supermarts Ltd, reported a mixed set of numbers for the second quarter of FY26, with consolidated net profit rising just 3.8% year-on-year to ₹684.85 crore, despite a healthy 15.4% growth in revenue to ₹16,676.3 crore. The muted bottom-line performance was attributed to surging employee expenses and finance costs, which weighed heavily on operating margins.

While the company added eight new stores during the July–September period, taking its total count to 432 outlets across India, the standout highlight was the revival in growth from older stores, which saw a 6.8% year-on-year increase in sales. This signals a return of footfalls and consumer confidence in DMart’s established locations, even as newer stores continue to ramp up.

📊 DMart Q2 FY26 Financial Snapshot

🧠 Key Operational Insights

• Older stores (2+ years) grew by 6.8% YoY, indicating strong brand loyalty and efficient inventory management.
• New stores contributed to topline growth but are yet to achieve profitability benchmarks.
• DMart Ready, the e-commerce arm, ceased operations in five cities, signaling a strategic shift back to offline dominance.
• Staff costs surged due to wage inflation and expansion-related hiring, while finance costs nearly doubled due to increased borrowings and interest rate impact.

🗣️ Management Commentary

CEO-designate Anshul Asawa noted, “While revenue growth remains robust, especially from our older stores, the cost structure has become more complex. We are evaluating operational efficiencies and rethinking our digital strategy to ensure long-term profitability.”

🧾 Store Performance Breakdown

The company continues to focus on Tier 2 and Tier 3 cities for expansion, with plans to add 12–15 stores in the next two quarters.

🧭 Strategic Outlook

DMart’s Q2 performance underscores the challenges of balancing growth with cost control. The company is expected to:

• Optimize store-level operations to improve margins
• Reassess digital footprint post DMart Ready scale-back
• Strengthen supply chain to mitigate inflationary pressures
• Focus on high-performing geographies for future expansion

Analysts believe DMart’s long-term fundamentals remain strong, but cost headwinds could persist through FY26 unless addressed proactively.

Disclaimer

This news content is based on verified financial disclosures, earnings reports, and market commentary as of October 12, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice, stock recommendation, or financial analysis and adheres to ethical journalism standards.