Avenue Supermarts reported a 19% year-on-year rise in Q4FY26 revenue to Rs 17,205 crore, supported by rapid store expansion and strong demand. The retailer added 58 new stores in the quarter, taking its total network beyond 500. Investors are weighing this aggressive growth strategy against profit margins and the company's current valuation relative to its historical averages.
What Happened
Avenue Supermarts, which operates the DMart retail chain, reported its financial performance for the fourth quarter of the 2026 fiscal year (Q4FY26). The company achieved revenue of Rs 17,205 crore, marking a 19% increase compared to the same quarter last year. This growth was driven by robust festive demand and a significant rise in new store additions. Net profit (PAT) for the quarter rose by 17% year-on-year to Rs 725 crore.
The Growth Strategy and Store Expansion
A key takeaway from the latest results is the acceleration in the company’s expansion strategy. Avenue Supermarts added 58 new stores during the final quarter, bringing its total store count to over 500. This brings the total store openings for the full fiscal year 2026 to 85, a notable increase from the 50 stores opened in fiscal year 2025. The company is actively targeting Tier 2 and Tier 3 markets to broaden its reach. Additionally, its e-commerce arm, DMart Ready, continues to operate in 18 cities with a focus on home delivery services in major metropolitan areas.
Profitability and Efficiency Metrics
While the company is expanding its footprint, investors are tracking how this impacts operational efficiency. In Q4FY26, the company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) reached Rs 1,232 crore, representing a 26% year-on-year increase. The EBITDA margin stood at 7.2%, reflecting an expansion of approximately 40 basis points compared to the previous year. A notable metric highlighted in recent reports is the like-for-like (LFL) sales growth, which reached 10.8% for stores operating for more than two years—a two-year high, indicating healthy demand in established locations.
How Investors May Read The Valuation
Market analysts often monitor Avenue Supermarts based on its forward price-to-earnings (P/E) ratio. Recent data suggests the stock is currently trading at approximately 71 times its one-year forward earnings. This valuation is slightly lower than its three-year average of 76 times. Geojit Financial Services recently published a research report on the company with a target price of Rs 5,063, citing confidence in the company's long-term expansion plans and sustained profitability, though investors typically balance these targets against broader market conditions.
What To Watch Next
Moving forward, the primary focus for investors will be whether the company can maintain its margin levels while sustaining an aggressive pace of store additions. Key monitorables include the execution timeline for new stores, the ability to replicate success in Tier 2 and Tier 3 markets, and the competitive environment in the retail sector. The sustainability of LFL growth in older stores will also remain a crucial indicator of the company's core business health.