DMart’s weak Q2 signals trouble

Persistent pressure

- Pallavi Pengonda [e-mail]

Avenue Supermarts Ltd's muted Q2FY26 earnings growth should ensure its shares remain range-bound in the foreseeable future.

Avenue, which owns and operates the DMart supermarket chain, faced continuous pressure on its standalone Ebitda margin, which contracted 28 basis points year-on-year (yo-y) to 7.58%. The quantum of Q2 Ebitda margin drop is the lowest in the past four quarters, so the trend is worth tracking ahead. Higher staff costs and other expenses dragged down Q2 margin. Thus, Ebitda grew 11% to ₹1,230 crore. While growth is better than QI’s 7.6%, it's not encouraging. Competition in the quick-commerce sector and a weaker sales mix have been Avenue's challenges for some time now.