DMart Sees Net Profit Surge as Revenue Grows, But Retail Giant Grapples With Slower Mature Store Expansion

DMart Sees Net Profit Surge as Revenue Grows, But Retail Giant Grapples With Slower Mature Store Expansion​

Avenue Supermarts (DMart) reported a mixed financial picture for the first quarter of FY27, achieving a notable rise in standalone net profit while facing signs of slowing growth within its established store network. The retail powerhouse continued to expand physically, yet management highlighted increased pressure on core categories and revenue per square foot.

The company's consolidated results showed steady movement, but internal metrics suggested significant shifts in market dynamics for the low-cost value retailer. These results provide a clear snapshot of the intense competitive landscape facing organized grocery chains today.

Standalone Profit Rises Amid Operational Pushes​

DMart reported that its standalone net profit increased by 12.8 per cent to ₹935.8 crore for the first quarter ended June 30. This profitability boost was supported by a strong performance in revenue from operations, which climbed 15.1 per cent to ₹18,343.5 crore compared to the same period last year.

On a consolidated basis, Avenue Supermarts saw net profit increase 11.3 per cent reaching ₹860.6 crore. Revenue from operations jumped 15 per cent to ₹18,794.5 crore in the quarter. These figures underscore DMart’s continued operational resilience despite sector pressures.

Slowing Like-For-Like Growth and Category Shifts​

The company noted a sharp deceleration in its like-for-like growth rate at 5.5% in Q1 FY27. This figure is lower than both the stellar 10.8% recorded in Q4 FY26 and the 7.1% seen in Q1 FY26, indicating that expansion into mature, long-standing stores is becoming considerably tougher.

Anshul Asawa, CEO and MD, stated that two years or older DMart stores saw a 5.5% growth rate during Q1 FY27, down from the 7.1% achieved in Q1 FY26. While growth remains strong within non-metro markets, the company observed flat growth in large metros among its established store footprint.

The core Foods category revenue share dipped to 54.93 per cent, down from 55.60 per cent in Q1FY26. This shift comes as staples and groceries face intense competition from rapid e-commerce and quick commerce players. Conversely, the share from general merchandise and apparel rose to 25.47 per cent, up from 24.73 per cent last year.

Strategic Expansion and Digital Business Losses​

DMart added three new stores during the quarter, bringing its total store count to 503 as of June 30. The retailer continues to emphasize a cluster-based approach for future expansion efforts. However, revenue from sales per sq.ft. was reported down 2.37 per cent year-on-year at ₹8,571 crore in Q1FY27.

The digital arm, Avenue E-Commerce Ltd (AEL), recorded a comprehensive loss of ₹91.39 crore for the quarter ended June 30, 2026. Vikram Dasu, CEO of AEL, confirmed that the company has discontinued operations in seven marginal cities and currently operates in 11 key locations.

Management is continuing to deepen its focus on improving their model within large metro cities. The mixed results confirm DMart’s enduring market presence but also signal the escalating challenges inherent in maintaining high growth rates across a vast, mature store network.