Three Quarters, Three Accelerations: 41%, 84%, Now 114%
This filing covers the quarter ended September 30, 2025 - Q2 of Avenue Supermarts' FY2026. Revenue grew 15.45% year-on-year to Rs. 16,676.30 crore. Net income grew 3.85% to Rs. 684.85 crore, on Operating Income (reconstructed) growth of 6.55% to Rs. 979.75 crore - still meaningfully below revenue growth, extending the compression pattern that's run through most of this arc.
The clearest single number this quarter: Finance Costs grew 114.22% year-on-year to Rs. 34.96 crore. This is the third consecutive quarter of finance-cost growth accelerating, not just staying elevated - 41.28% in Q4 FY2025, 83.58% in Q1 FY2026, and now 114.22%. Three data points in a clean escalating series is no longer something that can be waved off as base-effect noise around a small number; whatever is driving it (this bare filing format still discloses no balance sheet to confirm) is compounding, not settling. Employee Benefit Expense also set a new high for this arc, up 32.74% to Rs. 378.63 crore - exceeding last quarter's 30.29%, itself already the highest to that point.
The Prescription
Two of this site's most-tracked cost lines in DMart's coverage - employee costs and finance costs - are now both at their highest-ever growth rates simultaneously, in the same quarter. That's a materially different situation from earlier in this arc, when compression rotated between lines one at a time. If both continue compounding into the festive Q3, operating income growth could turn negative again, as it briefly did in Q4 FY2025. The company owes shareholders a direct explanation of the finance-cost trend specifically - three quarters of accelerating growth in borrowing-related costs, without a disclosed balance sheet to show what's actually being borrowed against, is the single biggest information gap in this entire multi-year coverage arc.
Key Financial Metrics
Quarter and six months ended September 30, 2025 (consolidated), compared against Q2 FY2025 (quarter ended September 30, 2024)
FX: INR 88.84 = USD 1 (September 30, 2025 close).
| Metric | Q2 FY2026 (INR) | Q2 FY2026 (USD) | YoY Change | Note |
|---|---|---|---|---|
| Net Revenue (revenue from operations) | Rs. 16,676.30 crore | ~$1,877.1M | ⚠️ +15.45% | |
| Total Income (incl. other income) | Rs. 16,695.87 crore | ~$1,879.3M | ⚠️ +15.32% | |
| Total Expenses | Rs. 15,751.06 crore | ~$1,773.0M | 🔴 +16.03% | Faster than revenue again |
| Operating Income (EBIT, reconstructed) | Rs. 979.75 crore | ~$110.3M | ⚠️ +6.55% | 5.88% margin, down from 6.37% a year ago |
| Adjusted EBITDA» (reconstructed) | Rs. 1,233.22 crore | ~$138.8M | ⚠️ +9.40% | 7.40% margin, down from 7.80% |
| Finance Costs | Rs. 34.96 crore | ~$3.9M | 🔴 +114.22% | Third straight quarter of accelerating growth: 41% → 84% → 114% |
| Profit Before Tax | Rs. 944.79 crore | ~$106.3M | ⚠️ +4.60% | |
| Tax Expense | Rs. 259.94 crore | ~$29.3M | ⚠️ +5.86% | Effective rate 27.51%, roughly flat vs 26.99% a year ago |
| Net Income | Rs. 684.85 crore | ~$77.1M | ⚠️ +3.85% | 4.11% net margin, down from 4.57% |
| Basic / Diluted EPS | ~Rs. 10.52 / ~Rs. 10.46 (derived: Rs. 684.85 crore ÷ 65.073 crore shares) | ~$0.118 / ~$0.118 | ⚠️ ~+3.9% | EPS not separately disclosed as a distinct figure in this filing; derived from net income and shares outstanding |
Operating Income and Adjusted EBITDA are reconstructed as PBT + Finance Costs [+ D&A for EBITDA]. No balance sheet or cash flow statement is disclosed as a separable quarter figure in this filing type. Paid-up equity share capital held flat at Rs. 650.73 crore (~65.07 crore shares).
Beyond the Usual
The Finance-Cost Escalation Is Now a Three-Quarter Trend
Finance Costs grew 41.28% ([Q4 FY2025](/analysis/dmart/2025-03/)), 83.58% ([Q1 FY2026](/analysis/dmart/2025-06/)), and 114.22% (this quarter) year-on-year, in a clean escalating sequence across three consecutive quarters. Each individual quarter's absolute number remains small relative to revenue, but the acceleration pattern itself - not just the level - is the story: this looks like a financing decision compounding in scale each quarter, not a one-off cost spike working its way through a base-effect comparison.
Stock Price and Valuation
DMart's stock closed this quarter at Rs. 4,475.40, up 2.36% from Q1 FY2026's Rs. 4,372.30 close - a modest continuation of the rebound, with the market so far treating the finance-cost acceleration as a manageable, sub-headline item rather than a reason to re-rate the stock.
DMart traded at roughly Rs. 2,91,228 crore (~$32.8B) market capitalization at this quarter's close (September 30, 2025) - a trailing-twelve-month P/E near 104x, up slightly from Q1 FY2026's ~103x as both price and TTM earnings edged higher together.
| Item | Value |
|---|---|
| Share price (September 30, 2025 close) | Rs. 4,475.40 |
| Shares outstanding | ~65.07 crore |
| Market capitalization | ~Rs. 2,91,228 crore (~$32.8B) |
| Enterprise value | Not computable without a balance sheet - market cap used as a proxy below |
No real DCF is possible without a balance sheet. Trailing-twelve-month net income through this quarter - Rs. 684.85 crore (this quarter) plus Q1 FY2026 (Rs. 772.81 crore), Q4 FY2025 (Rs. 550.79 crore), and Q3 FY2025 (Rs. 784.65 crore) - totals Rs. 2,793.10 crore, implying a trailing P/E near 104.3x. TTM earnings have now finally broken their two-quarter stall from mid-2025, but only modestly, and the two structural cost pressures flagged this quarter - accelerating finance costs and record employee-cost growth - are exactly the kind of items that could reverse that improvement before it becomes a genuine trend.
Peer-multiple comparison (trailing-twelve-month basis):
| Metric | This Quarter (TTM through Q2 FY2026) | Prior Quarter (TTM through Q1 FY2026) |
|---|---|---|
| TTM Net Income | Rs. 2,793.10 crore | Rs. 2,767.69 crore |
| Market Capitalization | ~Rs. 2,91,228 crore (~$32.8B) | ~Rs. 2,84,519 crore (~$33.2B) |
| Trailing P/E | ~104.3x | ~102.8x |
Both TTM earnings and price edged up together this quarter, keeping the multiple roughly stable - a break from the two prior quarters, where the multiple moved almost entirely on price alone.
Bull/base/bear scenario check (multiple-based sanity check applied to TTM earnings, not a full multi-year DCF - this site's established range across the arc, since a balance sheet-based EV/EBITDA build isn't available for this filing type):
| Scenario | Key assumption | Implied trailing P/E | Implied price/share |
|---|---|---|---|
| Bear | Multiple reverts toward the low end of this arc's observed trading range | 70x | ~Rs. 3,005 |
| Base | Multiple settles near the middle of this arc's observed trailing-P/E band | 100x | ~Rs. 4,293 |
| Bull | Multiple recovers toward the richest level this arc has shown | 130x | ~Rs. 5,580 |
| Current (period-end close) | — | ~104.3x (actual) | Rs. 4,475.40 |
The actual close still sits just above the base case, the same pattern as last quarter - the market continues pricing in a reacceleration that two straight quarters of record employee-cost and finance-cost growth make harder to count on, not easier.