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 DMart's key cost lines - 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 DMart's filings.
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, 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.