Avenue Supermarts Q2 Results: Dmart-parent reports 3.9% profit growth, margins narrow

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HomeMarket NewsAvenue Supermarts Q2 Results: Dmart-parent reports 3.9% profit growth, margins narrow

JPMorgan had maintained its "neutral" rating Avenue Supermarts with a price target of ₹4,350 in a note last week, stating that the revenue growth during the quarter will weigh on the near-term stock price.

 Dmart-parent reports 3.9% profit growth, margins narrow

Avenue Supermarts, which runs the retail chain Dmart, reported its results for the September quarter on Saturday, October 11. The numbers were higher on a year-on-year basis across parameters.

How Did DMart Fare In Q2

In its business update released earlier this month, Avenue Supermarts had reported a revenue growth of 15.5% year-on-year to ₹16,676.3 crore from the same quarter last year, when it raked in revenue figures of ₹14,444.5 crore. This was marginally lower than the 15.8% Compounded Annual Growth Rate (CAGR) it has reported in the last three years.

The profit numbers stood at ₹685 crore, compared to ₹659 crore, marking an uptick of 3.9% YoY.

Avenue Supermarts' Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 11% to ₹1,213.8 crore from ₹1,093.8 crore during the same quarter last year. Brokerage firm Jefferies had projected the company's EBITDA to grow by 10% year-on-year to ₹1,216 crore.

EBITDA margins for the quarter increased/narrowed by 29 basis points to 7.28% from 7.57% last year. Jefferies was working with a margin figure of 7.5%

The company had also added eight new stores during the quarter, taking the total store count to 432 at the end of the September quarter.

Analysts Say

In a note on Wednesday, brokerage firm HSBC wrote that pricing is the only moat that Dmart has in comparison to other retailers.

It sees challenges to sustaining a higher Same-Store-Sales Growth and expectations of a step-up in store additions cannot compensate for the muted same-store-sales-growth (SSSG).

As a result, the brokerage maintained its "reduce" rating on the stock with a price target of ₹3,700.

Goldman Sachs also maintained its "sell" recommendation on Avenue Supermarts, but cut its price target on the stock to ₹3,370 from ₹3,450 earlier. It said that the sales growth during the quarter was weaker-than-expected despite a low base for Dmart.

JPMorgan had maintained its "neutral" rating on the stock with a price target of ₹4,350, stating that the revenue growth during the quarter will weigh on the near-term stock price.

Shares of Avenue Supermarts ended 0.5% higher on Friday at ₹4,328. The stock is down 6% in the last month, but has gained over 20% so far in 2025.

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(Edited by : Hormaz Fatakia)

First Published: 

Oct 11, 2025 3:53 PM

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