Are Avenue Super. latest results good or bad?

Avenue Supermarts Ltd., which operates the DMart brand, reported its financial results for the quarter ending September 2025. The company achieved consolidated net sales of ₹16,676.30 crores, reflecting a year-on-year growth of 15.45% compared to ₹14,444.50 crores in the same quarter of the previous year. This growth in sales indicates a robust demand for its offerings, despite the challenges faced in the competitive retail landscape.
However, the company's consolidated net profit for the quarter was ₹685.01 crores, which represents a year-on-year increase of 3.86% from ₹659.58 crores in Q2 FY25. While this shows some profit growth, it is noteworthy that the profit has declined by 11.38% on a quarter-on-quarter basis from ₹772.97 crores in Q1 FY26. This sequential decline raises concerns about the company's profitability trajectory.

Operating margins also experienced compression, decreasing to 7.28% from 7.94% in the previous quarter and from 7.57% year-on-year. This decline in operating margin suggests that the company is facing increased cost pressures, potentially due to rising employee expenses and competitive dynamics in the retail sector.

The results indicate that while Avenue Supermarts continues to grow its revenue, the operational efficiency and profitability are under scrutiny. The company has seen an adjustment in its evaluation, reflecting the market's response to these financial results and the underlying operational challenges. Overall, the latest financial performance highlights a critical juncture for Avenue Supermarts, where maintaining growth while managing costs will be essential for future success.