Supermarket chain DMart's Q1 profit falls as competition, higher costs bite

DMart's consolidated net profit dropped to 7.73 billion rupees ($90.12 million) in the three months to June-end from 7.74 billion a year earlier.

India's Avenue Supermarts, which operates the DMart chain of supermarkets, reported a small decline in first-quarter profit as higher operating costs and rising competition from quick commerce players ate into margins.

DMart's profit after tax margin stood at 4.7% in the first quarter of fiscal 2026, compared to 5.5% last year. (Pixabay/Representative)

Consolidated net profit dropped to 7.73 billion rupees ($90.12 million) in the three months to June-end from 7.74 billion a year earlier. Sales grew 16% in the quarter.

Analysts have flagged weakness in DMart's first-quarter sales growth, provided in a business update before results, cautioning about sustained margin pressure ahead as rivals, including online shopping platforms, gain ground.

Quick-commerce platforms such as Zepto, Eternal's BlinkIt and Swiggy's Instamart, which deliver items in as little as ten minutes, are increasingly attracting tech-savvy customers by subsidizing delivery and offering discounts.

DMart's profit after tax margin stood at 4.7% in the first quarter of fiscal 2026, compared to 5.5% last year.

The company attributed the decline in gross margins to "continued competitive intensity" in the consumer products space. Operational costs rose due to capacity building efforts and wage inflation, DMart said.

It utilizes a low-cost, low price strategy where it procures goods at competitive prices and sells them at heavily discounted rates, making it especially lucrative for budget-conscious and bulk buyers.

($1 = 85.7700 Indian rupees)

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Leroy Leo)