Avenue Supermarts Opening Bell Updates: Q2 Profit Growth Lags Revenue Amid Cost Pressures

Avenue Supermarts (DMART) is set for a cautious open this Monday, trading notably below its previous close of ₹3,516.80. The stock opened at ₹3,407.00 and has seen early action between ₹3,365.60 and ₹3,440.30, currently holding at ₹3,386.00, marking a decline of 3.72% in early indications. This immediate pressure follows the company's Q2 FY27 earnings announcement over the weekend, which, despite revenue growth, highlighted concerns around profitability and rising costs.

Overnight & Global Cues
Global market signals are mixed this morning, suggesting a subdued start for Indian equities. US markets closed higher on Friday, with the Dow Jones, S&P 500, and Nasdaq Composite all registering gains. However, Asian markets are trading mixed, with South Korea's Kospi and Kosdaq declining, while Hong Kong's Hang Seng futures pointed to a higher opening. Domestically, Gift Nifty trends indicate a mildly positive start for benchmark indices. On the institutional front, provisional data for October 9, 2026, revealed continued FII outflows of ₹3,568.90 crore, absorbed by robust DII buying of ₹4,743.26 crore. This dynamic of domestic support countering foreign selling has been a recurring theme, with FIIs on an 11-day selling streak and DIIs on a 30-day buying streak. The broader Indian retail sector, particularly value retail, is expected to show resilience with projected revenue growth of 11.8% and EBITDA growth of 12.7% for Q2 FY27, largely driven by strong domestic demand, although the apparel segment may face headwinds due to a festive calendar shift. Macro concerns like the RBI's measures to stabilize the rupee and global inflation dynamics stemming from geopolitical events and commodity prices continue to be monitored.

Recent Developments
Avenue Supermarts reported its Q2 FY27 financial results post-market on Saturday, October 10, 2026. The company saw an 8.5% year-on-year rise in consolidated net profit to ₹743 crore, with consolidated revenue growing 17.8% to ₹19,644 crore. However, profitability metrics showed compression, with the EBITDA margin narrowing to 7.1% from 7.3% a year ago, and the net profit margin slipping to 3.8% from 4.1%. Management attributed this to wage inflation at the entry level and higher finance costs, which jumped 82.8% year-on-year. Despite these pressures, DMart continued its expansion, adding 15 new stores during the quarter to reach a total of 518 outlets. A positive highlight was the acceleration in like-for-like sales growth for older stores (operating for at least two years), which rose to 9.5% compared to 6.8% in the year-ago period. Conversely, the DMart Ready e-commerce segment saw its operational footprint contract to 11 cities from 19, reporting a net loss of ₹75.35 crore in Q2 FY27, as the focus shifts to operational efficiency over expansion. Analyst commentary from early October, prior to the full results, saw brokerages like Citi and Goldman Sachs retaining 'sell' ratings, citing expensive valuations and intensified quick-commerce competition.

Key Levels to Watch
The stock's previous close was ₹3,516.80, with today's open at ₹3,407.00. The day's low so far stands at ₹3,365.60. While no 52-week high/low was provided in the prompt, recent analyst targets suggest a cautious outlook. Citi's target price was ₹3,300, while the average 12-month consensus target from 35 analysts is around ₹4,332.96, with a low forecast of ₹3,282.50. The current trading price is hovering close to these lower analyst price targets, which could indicate a potential support zone or further downside if sentiment remains weak.

Opening Outlook
As the session unfolds, traders will be closely watching DMART's ability to hold the ₹3,350-₹3,300 levels, given the recent earnings report and analyst views. The market will weigh the robust store expansion and accelerating mature-store growth against the margin pressures and the strategic pullback in the e-commerce segment. The broader market sentiment, particularly FII activity and the performance of the retail sector, will also influence DMART's trajectory. Any fresh institutional commentary on the Q2 results will be critical for shaping near-term investor perception.

Disclaimer: The information provided in this article is based on news reports and is not intended as investment advice. Investing in stocks involves risk. LatestLY advises its readers to consult with a financial advisor before making any investment decisions.

(The above story first appeared on LatestLY on Oct 12, 2026 09:37 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).