Avenue Supermarts, which operates the popular DMart retail chain, announced its financial results for the third quarter of fiscal year 2026 on Saturday, January 10, 2025. The company reported robust growth in profitability during the October to December quarter, demonstrating strong operational performance in the competitive retail landscape.

Financial Performance Overview

The company's financial metrics for the quarter showed significant improvement compared to the previous year. The following table summarizes the key financial performance indicators:

The net profit growth of 17.6% year-on-year represents a substantial increase, with the company achieving ₹923.05 crore in the third quarter of FY26 compared to ₹784.65 crore in the same period of the previous fiscal year. This performance indicates the company's ability to maintain profitability growth despite various market challenges.

Company Performance Analysis

Avenue Supermarts' strong quarterly results reflect the continued strength of its DMart retail operations. The company filed its financial results with the stock exchange, providing transparency to investors and stakeholders about its operational performance during the October to December period.

The year-on-year comparison demonstrates the company's consistent growth trajectory, with the retail chain maintaining its position as a significant player in the Indian retail sector. The financial results were announced following the completion of the third quarter of the current fiscal year, providing stakeholders with timely information about the company's performance.

Avenue Supermarts, operator of the D-Mart retail chain, is scheduled to announce its Q3FY26 earnings on January 10, 2026. The results come amid growing market concerns about the company's growth trajectory and margin pressures, following a softer-than-expected business update released on January 2.

Q3FY26 Financial Performance

The company's Q3FY26 business update revealed mixed signals for investors. Key financial metrics for the quarter ended December 2025 show:

While the 13% revenue growth appears healthy on the surface, it falls below the company's three-year compound annual growth rate (CAGR) and trails the pace of store additions, suggesting negative same-store sales growth (SSSG). This performance has already impacted the stock, which has corrected meaningfully in recent months.

Margin Compression Expected

Analysts anticipate significant margin pressures in Q3FY26 results. On a consolidated basis, market expectations point to EBITDA growth of approximately 8-9% against the 13% revenue growth, indicating margin compression during the quarter.

Several factors are contributing to this pressure:

• GST Rate Cuts: Recent reductions in GST rates on staple and consumable categories from 18% to 12% or 5% have likely impacted average realizations
• Competitive Intensity: Rising competition in the retail sector is limiting pricing power
• Product Mix Changes: Shifting assortment mix is affecting overall profitability
• Price-Led Demand: Stimulation strategies are impacting operating leverage

D-Mart Ready Contribution

A key focus area for Q3FY26 will be the performance of D-Mart Ready, the company's online grocery and e-commerce platform. Market expectations suggest this digital arm could contribute incremental revenue of ₹250-300 crore during the quarter.

While D-Mart Ready's contribution would support overall revenue growth, the profitability impact remains uncertain given typically lower margins in online retail compared to traditional brick-and-mortar operations.

Key Areas to Monitor

Investors and analysts will closely watch several critical aspects in the upcoming earnings announcement:

• Operating performance trends and same-store sales growth trajectory
• Changes in product mix and their impact on margins
• Management commentary on pricing strategies and margin outlook
• Store expansion guidance and growth plans
• Performance metrics for D-Mart Ready platform

Over the first nine months of FY26, faster-than-expected store additions have been among the few positive highlights, with management signaling an accelerated expansion pace.

Stock Performance and Market Position

Ahead of the earnings announcement, Avenue Supermarts shares gained 0.30% on Friday, closing at ₹3,801.30. The Mumbai-headquartered retailer maintains a market capitalization of ₹2,47,363.00 crore but has delivered negative returns of approximately 9% over the past six months, reflecting investor concerns about growth momentum and margin pressures.

The upcoming Q3FY26 results will be crucial in determining whether management can provide reassurance on growth stabilization, same-store sales recovery, and sustained expansion plans that could offer relief to the stock after its recent correction.