Company Update : Avenue Supermarts by Motilal Oswal Financial Services Ltd
DMART 2QFY26 pre-quarter update
Revenue grew 15% YoY (vs. 16% YoY in 1Q and our est. ~17% YoY)
* Standalone revenue at INR162b grew 15.4% YoY (on weak base of 14% YoY in 2QFY25), slightly weaker than our pre-quarter estimated growth of ~17% YoY.
* Growth was largely driven by 13% YoY store addition and likely midsingle digit SSSG.
* DMart added eight stores during the quarter (17 in 1HFY26 vs. 12 in 1HFY25), taking the total count to 432 stores.
* Productivity remains weak
* Annualized revenue/store grew by a modest ~1% YoY to INR1.52b (vs. +2% YoY growth in 1QFY26).
* Annualized revenue/sqft. (calculated) was up ~1% YoY on our estimate to INR36.5k/sqft (vs. ~2% YoY growth in 1QFY26).
* DMart has been facing margin pressure over the past few quarters, and given likely muted SSSG, we expect margin pressures to continue in 2QFY26
Acceleration in store additions remains the key monitorable for DMart. We estimate 60 net store additions in FY26 (vs. 50 in FY25).
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