Dmart reports flat Q1 profit, margins slip on higher costs

The retailer opened 9 new stores in the quarter taking its total to 424 at the end of June.
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RAMAKRISHNA G

Retailer Avenue Supermarts reported stagnant net profit in Q1 FY26, while operating margin was 80 basis points lower on high competitive intensity in the fast moving consumer goods segment and higher operating costs.

The operator of Dmart chain of hypermarkets reported consolidated net profit of ₹773 crore in Q1, unchanged from the year-ago period, while EBITDA margin came in at 7.9 per cent compared to 8.7 per cent year ago.

Total revenue in the quarter was 16.3 per cent higher at ₹16,360 crore.

“Revenue growth impact of approximately 100-150 bps was primarily due to high deflation in many staples and non-food products,” said Managing Director and Chief Executive Officer Neville Noronha.

“Gross margins are lower as compared to the same period in the previous year, due to continued competitive intensity within the FMCG space,” he said.

Investments in improving service levels, capacity building and inflation at entry level wages resulted in higher operating costs, it said. Total expenses during the quarter rose over 17 per cent.

Like-for-like growth fell to 7.1 per cent from 9.1 per cent year ago, though revenue from sales per square feet was a tad higher at Rs 8779.

The retailer opened 9 new stores in the quarter taking its total to 424 at the end of June.

Foods contributed over 55 per cent to revenue, while the share of FMCG items was just under 20 per cent. General merchandise and apparel contributed about a fourth.

Published on July 11, 2025