Avenue Supermarts, the operator of DMart, reported year on year growth in revenue and net profit for the second quarter of FY27.

The performance reflects continued business expansion, although a slight decline in operating margin highlights the importance of controlling costs as the retail network grows.

Consolidated revenue from operations increased 18% year on year to ₹19,657.50 crore. The growth was supported by the company’s expanding store network and continued demand across its retail business.

Consolidated net profit rose 8.5% to ₹742.98 crore, compared with ₹685.01 crore in the corresponding quarter last year. Profit growth remained positive, but it was slower than revenue growth.

Consolidated EBITDA increased 14.7% to ₹1,393 crore from ₹1,214 crore a year earlier. However, the EBITDA margin edged down to 7.5% from 7.6%, indicating that operating costs continued to put some pressure on profitability.

Management attributed the margin pressure in part to higher entry level wages. For a retailer operating on relatively thin margins, even small changes in staff costs, merchandise expenses and other operating costs can affect earnings.

On a standalone basis, revenue reached ₹18,850 crore and net profit increased 7.6% to approximately ₹804 crore. Standalone EBITDA margin also eased to 7.3%, making cost efficiency an important area to watch in upcoming quarters.

DMart opened 15 new stores during Q2 FY27, taking its nationwide network closer to 525 locations.

Store additions can expand customer reach and create opportunities for future revenue growth, but new locations also bring upfront operating costs and take time to mature.

An encouraging development was the improvement in sales growth at mature stores. Locations operational for at least two years recorded 9.5% growth, compared with 6.8% in Q2 FY26.

This measure helps investors assess performance beyond the contribution from newly opened stores.

The festive calendar also matters when comparing quarterly performance. With the festive period shifting into Q3 this year, some consumer demand may be reflected in the following quarter rather than Q2.

Investors should therefore evaluate the next set of results alongside the timing of seasonal sales.

DMart’s business model depends on attracting customers through value pricing, efficient operations and high product turnover.

Sustaining these advantages while expanding the store network will be important for maintaining its competitive position in organised retail.

The key question is whether revenue growth can translate into stronger profit growth over time.

If wage expenses and other operating costs continue to rise faster than the company can improve productivity, margins may remain under pressure.

Investors should monitor same store sales growth, new store productivity, revenue per square foot, gross margins and operating expenses.

The pace at which new locations mature will also influence how efficiently the company converts expansion into earnings.

Overall, DMart delivered healthy revenue growth, higher profit and improving mature store sales growth in Q2 FY27.

The slight margin decline remains a factor to monitor, and future performance will depend on demand, cost control and the returns generated by continued store expansion.