The Cleanest Quarter of the Whole Multi-Year Arc
This filing covers the quarter ended March 31, 2026 - Q4 of Avenue Supermarts' FY2026, filed alongside the full-year FY2026 audited results. Revenue grew 18.91% year-on-year to Rs. 17,683.86 crore. Operating Income (reconstructed) grew 27.85% to Rs. 945.14 crore - the strongest quarterly operating-income growth anywhere in this site's coverage of DMart, comfortably ahead of the previous best (Q4 FY2024's 21.25%). Total expenses grew 18.49%, genuinely slower than revenue, and Other Expenses specifically grew just 12.04% - well below revenue growth, a sharp reversal from most of this arc. Operating margin recovered to 5.34% from 4.97% three quarters earlier, though it remains below the 6%+ levels seen through most of 2023-2024.
Two of this arc's persistent warning signals actually got worse this quarter, not better. Employee Benefit Expense grew 35.68% year-on-year - a new high for this arc, up from last quarter's 30.48% (itself second only to Q2 FY2026's 32.11%), which undercuts the idea that last quarter's jump was a one-off, transition-related spike tied to the CEO succession disclosed that quarter - if it had been one-off, this quarter's growth should have fallen back toward the arc's normal range, not exceeded the recent high. Finance Costs grew 116.09% year-on-year - still more than doubling, and a re-acceleration past Q2 FY2026's previous high of 114.22%, following last quarter's dip to 102.20% that broke a three-quarter acceleration streak (41% → 84% → 114%). Read across five quarters, the pattern is 41% → 84% → 114% → 102% → 116% - a brief one-quarter pause, not a genuine reversal.
The Prescription
This is the best single-quarter operating result in this site's multi-year DMart coverage, and it deserves to be read as real - the expense discipline behind it (Other Expenses growing at a third of revenue's pace) is broad-based, not a one-line accounting artifact. But neither warning light from the prior several quarters has actually turned off, and both are now worse than they were last quarter: employee-cost growth at a new arc-high of 35.68% and finance-cost growth back above its previous peak at 116.09% would both have been the standout, most-flagged number in almost any earlier quarter in this arc, and last quarter's brief easing on both metrics has already proven temporary rather than the start of a real cooldown. The real test is the next quarter, the incoming CEO's first full one, which should show whether either trend keeps compounding the way finance costs already did once before, in Q1 FY2027 - the very next quarter this site's coverage of DMart resumes contemporaneously, where finance costs would in fact jump again on newly disclosed commercial-paper issuance.
Key Financial Metrics
Quarter and year ended March 31, 2026 (consolidated), compared against Q4 FY2025 (quarter ended March 31, 2025)
FX: INR 93.48 = USD 1 (March 31, 2026 close).
| Metric | Q4 FY2026 (INR) | Q4 FY2026 (USD) | YoY Change | Note |
|---|---|---|---|---|
| Net Revenue (revenue from operations) | Rs. 17,683.86 crore | ~$1,891.7M | ✅ +18.91% | |
| Total Income (incl. other income) | Rs. 17,702.03 crore | ~$1,893.7M | ✅ +18.86% | |
| Total Expenses | Rs. 16,797.86 crore | ~$1,796.9M | ✅ +18.49% | Slower than revenue - genuine margin expansion |
| Operating Income (EBIT, reconstructed) | Rs. 945.14 crore | ~$101.1M | ✅ +27.85% | 5.34% margin, up from 4.97% a year ago |
| Adjusted EBITDA» (reconstructed) | Rs. 1,228.70 crore | ~$131.4M | ✅ +25.36% | 6.95% margin, up from 6.59% |
| Finance Costs | Rs. 40.97 crore | ~$4.4M | 🔴 +116.09% | Still more than doubling; a re-acceleration past Q2 FY2026's prior peak of 114.22%, after a one-quarter dip to 102.20% last quarter |
| Profit Before Tax | Rs. 904.17 crore | ~$96.7M | ✅ +25.53% | |
| Tax Expense | Rs. 247.75 crore | ~$26.5M | ⚠️ +46.15% | Effective rate 27.40%, up from 23.53% a year ago |
| Net Income | Rs. 656.42 crore | ~$70.2M | ✅ +19.18% | 3.71% net margin, roughly flat vs 3.70% |
| Basic / Diluted EPS | ~Rs. 10.09 / ~Rs. 10.03 (derived: Rs. 656.42 crore ÷ 65.196 crore shares) | ~$0.108 / ~$0.107 | ✅ ~+19.0% | 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 rose slightly to Rs. 651.96 crore (~65.20 crore shares) from Rs. 650.73 crore, on ESOP exercise.
A higher effective tax rate (27.40% vs 23.53% a year ago) meant net income growth (19.18%) trailed operating income growth (27.85%) by nearly nine points this quarter - the tax-rate normalization that had cushioned Q4 FY2025's decline a year ago has now reversed and become a modest headwind instead.
Beyond the Usual
Both Warning Signals Got Worse, Not Better
Employee-cost growth rose to a new arc-high of 35.68%, up from [last quarter's 30.48%](/analysis/dmart/2025-12/), and finance-cost growth rose to 116.09%, a new high past [Q2 FY2026's 114.22% peak](/analysis/dmart/2025-09/), after [last quarter's dip to 102.20% broke a three-quarter acceleration streak](/analysis/dmart/2025-12/#finance-costs-three-quarters-of-acceleration-then-a-break). Both remain well above revenue growth in absolute terms - what looked last quarter like the start of a cooldown was, on this quarter's numbers, only a one-quarter pause.
Stock Price and Valuation
DMart's stock closed this quarter at Rs. 3,956.80, up 4.62% from Q3 FY2026's Rs. 3,782.20 close - a modest rebound that only partially recovered the prior quarter's steep festive-season pullback, leaving the stock still well below its mid-2024 highs.
DMart traded at roughly Rs. 2,57,968 crore (~$27.6B) market capitalization at this quarter's close (March 30, 2026) - a trailing-twelve-month P/E near 87x, roughly flat versus Q3 FY2026's ~86x, as this quarter's strong earnings growth and modest price gain moved together.
| Item | Value |
|---|---|
| Share price (March 30, 2026 close) | Rs. 3,956.80 |
| Shares outstanding | ~65.20 crore |
| Market capitalization | ~Rs. 2,57,968 crore (~$27.6B) |
| 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. 656.42 crore (this quarter) plus Q3 FY2026 (Rs. 855.78 crore), Q2 FY2026 (Rs. 684.85 crore), and Q1 FY2026 (Rs. 772.81 crore) - totals Rs. 2,969.86 crore, implying a trailing P/E near 86.9x. This closes out FY2026 with genuinely improving operating leverage at a multiple near the cheap end of this site's multi-year coverage of the stock - a combination that would normally argue for a re-rating, except that the two structural cost pressures tracked across the prior several quarters (employee costs, finance costs) are both at new highs rather than resolved, and the very next quarter this site covers contemporaneously (Q1 FY2027) shows finance costs jumping again on newly disclosed commercial-paper borrowing - a reminder that a quarter's improvement in this arc has repeatedly proven to be temporary rather than a clean turn.
Peer-multiple comparison (trailing-twelve-month basis):
| Metric | This Quarter (TTM through Q4 FY2026) | Prior Quarter (TTM through Q3 FY2026) |
|---|---|---|
| TTM Net Income | Rs. 2,969.86 crore | Rs. 2,864.23 crore |
| Market Capitalization | ~Rs. 2,57,968 crore (~$27.6B) | ~Rs. 2,46,119 crore (~$27.4B) |
| Trailing P/E | ~86.9x | ~85.9x |
TTM earnings and price both edged up together this quarter, leaving the multiple roughly flat - the same "moving together" pattern flagged in the stock-price section above, and a contrast with most of the prior year's swings, which were driven almost entirely by 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. 3,188 |
| Base | Multiple settles near the middle of this arc's observed trailing-P/E band | 100x | ~Rs. 4,555 |
| Bull | Multiple recovers toward the richest level this arc has shown | 130x | ~Rs. 5,921 |
| Current (period-end close) | — | ~86.9x (actual) | Rs. 3,956.80 |
The actual close sits between the bear and base scenarios, closer to the base case - genuinely cheap by this arc's own history, but the two persistent cost pressures (employee costs, finance costs) mean that discount isn't obviously a free lunch; it's priced for real, not yet resolved, risk.