Avenue Supermarts Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Avenue Supermarts Ltd filed with BSE on 04 Aug 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Avenue Supermarts reported FY26 revenue of close to Rs 67,000 crore with EBITDA margin of about 7.8% and PAT margin of about 4.8%, alongside like-for-like store growth of 8.1%. Management discussed a strategy of consolidating its DMart Ready e-commerce operations into 11 key cities to focus on assortment, six-hour delivery, and user experience, while exiting seven other cities. The company also addressed store expansion plans, an increase in leased stores to 68 out of over 500 total stores, and the impact of metro market saturation and quick commerce competition on same-store sales growth.
2 statements from this call are not shown because their supporting quotes could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Bill cuts: close to 40 crore (FY26)
p. 5
“We have a healthy growth reaching close to 40 crore bill cuts in the year gone by.”
Niladri Deb, page 5 of the filed PDF · View the filing
Like-for-like store growth: 8.1% (FY26)
p. 5
“Our likefor-like store growth, which is stores more than two years old, grew about 8.1% for the last year.”
Niladri Deb, page 5 of the filed PDF · View the filing
Retail business area: 20.6 million square feet (as of March 2026)
p. 5
“At the end of March 2026, we had about 20.6 million square feet of retail business area, and our revenue per square foot from all stores put together came in about flat at INR33,422 per square foot.”
Niladri Deb, page 5 of the filed PDF · View the filing
Revenue: close to INR67,000 crores (FY26)
p. 5
“We reported a turnover of close to INR67,000 crores in the year gone by.”
Niladri Deb, page 5 of the filed PDF · View the filing
EBITDA margin: about 7.8% (FY26)
p. 5
“EBITDA margin came in at about 7.8%.”
Niladri Deb, page 5 of the filed PDF · View the filing
Profit after tax: INR3,224 crores, about 4.8% (FY26)
p. 5
“Profit after tax was about 4.8%, INR3,224 crores of profit, and we generated INR4,168 crores of cash from the operations.”
Niladri Deb, page 5 of the filed PDF · View the filing
Inventory days: 33.2 (FY26)
p. 5
“The inventory days went up to 33.2.”
Niladri Deb, page 5 of the filed PDF · View the filing
Days payables: 7.2 (FY26)
p. 5
“Days payables remained flat at 7.2, continuing our strategy of paying vendors quickly.”
Niladri Deb, page 5 of the filed PDF · View the filing
Total Debt: INR2,267 crores (as of March 2026)
p. 5
“Total Debt inched up slightly to INR2,267 crores.”
Niladri Deb, page 5 of the filed PDF · View the filing
Net borrowing: close to INR965 crores (as of March 2026)
p. 5
“The actual debt, which is net borrowing on the company, is close to INR965 crores as of March 2026 end.”
Niladri Deb, page 5 of the filed PDF · View the filing
Fixed asset turnover: 3.2 times (FY26)
p. 5
“Fixed asset turnover came in at about 3.2 times, and the inventory turnover came at 12.8, which is an outcome of the higher number of inventory days that we're holding, leading to return on net worth coming at about 13.5% during the year and ROCE at about 17.1%, which are slightly lower than what we reported the prior year.”
Niladri Deb, page 5 of the filed PDF · View the filing
Return on net worth: about 13.5% (FY26)
p. 5
“leading to return on net worth coming at about 13.5% during the year and ROCE at about 17.1%, which are slightly lower than what we reported the prior year.”
Niladri Deb, page 5 of the filed PDF · View the filing
Sales growth (standalone): close to 16% (FY26)
p. 5
“Sales grew by close to 16%.”
Niladri Deb, page 5 of the filed PDF · View the filing
Gross margin expansion: 16 bps (FY26)
p. 5
“Gross margin expanded by 16 bps.”
Niladri Deb, page 5 of the filed PDF · View the filing
Employee cost expansion: 27 bps (FY26)
p. 5
“Employee cost expanded by 27 bps due to the investment in service levels of the business, and other expenses declined by 9 bps, leading to EBITDA which was almost flat at about 7.85%.”
Niladri Deb, page 5 of the filed PDF · View the filing
Avenue E-commerce sales growth: about 17% (FY26)
p. 5
“so the sales grew about 17%.”
Niladri Deb, page 5 of the filed PDF · View the filing
Avenue E-commerce net loss: INR307 crore (FY26)
p. 5
“EBITDA declined by about 43%, so we had a bigger EBITDA drain of 84 bps, and PBT was about 24% lower, at a net loss of INR307 crore.”
Niladri Deb, page 5 of the filed PDF · View the filing
Align Retail sales growth: about 16.5% (FY26)
p. 5
“Align Retail, which is the grocery packing business, grew about 16.5%, and PAT grew about 24%.”
Niladri Deb, page 5 of the filed PDF · View the filing
Avenue Food Plaza growth: about 35.5% (FY26)
p. 5
“Avenue Food Plaza, which handles the fast and ready food business that we have in adjacency to each DMart store, grew about 35.5% and returned a PAT of 9%.”
Niladri Deb, page 5 of the filed PDF · View the filing
New states entered: five (FY26)
p. 4
“So last year, we entered five new states, and we also hit the 500-store milestone.”
Anshul Asawa, page 4 of the filed PDF · View the filing
Stores opened: 85 stores (FY26)
p. 4
“having reached 500 stores, having opened 85 stores last year.”
Anshul Asawa, page 4 of the filed PDF · View the filing
Leased stores: 68 stores (as of FY26 end)
p. 7
“We had 68 lease stores. Not 65 but 68.”
Niladri Deb, page 7 of the filed PDF · View the filing
Leased stores added last year: 15 out of 85 (FY26)
p. 14
“we had 15 stores added last year, which were on the lease model out of the 85.”
Anshul Asawa, page 14 of the filed PDF · View the filing
Employee cost increase: 33% (standalone financials)
p. 20
“So that also has contributed to the 33% hike in employee cost in the standalone financials.”
Niladri Deb, page 20 of the filed PDF · View the filing
DMart Ready pickup points: 165
p. 33
“We currently have 165 pickup points.”
Vikram Dasu, page 33 of the filed PDF · View the filing
Contract labor cost increase (AEL): 24%
p. 32
“you must have noticed that our contract labor cost went up by 24% and transport by 34% or so, if you are alluding to some of the financials that we published for AEL.”
Vikram Dasu, page 32 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Store additions — around 15% of store base annually · coming years
stated as an aspiration by Anshul Asawa
p. 4
“our benchmarks will remain that we should be opening around 15% of our store base as the number that we want to increase annually.”
Anshul Asawa, page 4 of the filed PDF · View the filing
General merchandise and apparel contribution — 22% to 23%
stated as an aspiration by Anshul Asawa
p. 10
“we've been maintaining for the last few years that we expect this particular part of the business to be somewhere in that 22% to 23% kind of a range.”
Anshul Asawa, page 10 of the filed PDF · View the filing
Gross margin — 14% to 15% · medium to long term
stated as an aspiration by Anshul Asawa
p. 19
“if you look at the financials over the last 5, 6, maybe even 7 or 8 years, our margins have been broadly in that range of 14% to 15% at a gross margin level.”
Anshul Asawa, page 19 of the filed PDF · View the filing
Net margin — around 5%
stated as an aspiration by Anshul Asawa
p. 19
“15% kind of a gross margin and let's say around a 5% kind of a net margin should be the North Star for this business even in the future.”
Anshul Asawa, page 19 of the filed PDF · View the filing
Same-store sales growth — current levels · coming financial year
stated conditionally by Anshul Asawa
p. 35
“I think what we are at this point of time saying is that in the coming financial year, we see that this is something which is, possible for us to deliver.”
Anshul Asawa, page 35 of the filed PDF · View the filing
Borrowing level — INR2,000 crores · by end of the year
stated conditionally by Niladri Deb
p. 21
“So we might go to an INR2,000 crores borrowing by the end of the year, but that is all going towards managing capex.”
Niladri Deb, page 21 of the filed PDF · View the filing
Debt requirement — next two-three years
stated as an aspiration by Niladri Deb
p. 34
“as the number of stores grows, we believe in next twothree years, the existing stores will generate enough capital for us to not keep on borrowing anymore.”
Niladri Deb, page 34 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said the strategy has not changed and there is no conscious effort to increase private label shelf space beyond customer choice.
Answered by Anshul Asawa
Asked by Aditya Soman: Has the 20-20-20 private label strategy changed under new leadership, and is shelf space being deliberately shifted toward private labels?
p. 6
“there is no such conscious effort to try and drive shelf space. A lot of what you see on the shelf in DMart is driven more by customer choice.”
Anshul Asawa, page 6 of the filed PDF · View the filing
Management attributed it to store saturation/high throughput in old dense stores plus increased competition.
Answered by Anshul Asawa
Asked by Aditya Soman: What is causing the slowdown in metro same-store sales growth?
p. 7
“a combination of capacity, saturation, high throughput that we are already getting from these stores, plus competition is what to our mind is the reason for some of the large metros to slow down as far as same-store growth is concerned.”
Anshul Asawa, page 7 of the filed PDF · View the filing
Management said vendors are in fact doubling down on their DMart partnership, not reducing focus.
Answered by Anshul Asawa
Asked by Abneesh Roy: Are FMCG vendors shifting focus away from DMart due to quick commerce growth?
p. 8
“In fact, I would say that many of them in fact are doubling down.”
Anshul Asawa, page 8 of the filed PDF · View the filing
Management said SSSG for older stores is likely to stay near current levels rather than rise significantly.
Answered by Anshul Asawa
Asked by Avi Mehta: Can same-store sales growth return to double digits?
p. 9
“same-store growth would possibly be hovering more in the range that we are seeing today, and we are not likely to see that go up considerably, all things being constant.”
Anshul Asawa, page 9 of the filed PDF · View the filing
Management said it is unclear if the buildup is finished, as the company is building capacity ahead of a larger anticipated organization size.
Answered by Niladri Deb
Asked by Anand Shah: Has the staff cost buildup for capability investment peaked?
p. 11
“Whether this is the end or not, very difficult to say, but I think we are building the organization for a very large organization size.”
Niladri Deb, page 11 of the filed PDF · View the filing
Management said they don't track store-level P&L granularity, focusing instead on overall productivity.
Answered by Anshul Asawa
Asked by Garima Mishra: Do store-level margins get individually tracked and managed given wage inflation?
p. 12
“We don't look at a store level margin in that much detail, and this is not a metric that we chase with our store teams.”
Anshul Asawa, page 12 of the filed PDF · View the filing
Management confirmed 15 of 85 stores were leased and said PBT is a fairer indicator given AS 116 lease accounting below EBITDA.
Answered by Niladri Deb
Asked by Arnab Mitra: How many of the 85 stores added last year were leased, and does leasing change the EBIT vs EBITDA analysis?
p. 14
“the finance and the depreciation cost under AS 116 comes below EBITDA, so you can look at PBT as a fair indicator of the impact of lease cost in the P&L.”
Niladri Deb, page 14 of the filed PDF · View the filing
Management said there is no plan to integrate AEL with ASL, as the online customer has different needs and store throughput would not support omnichannel operations.
Answered by Anshul Asawa
Asked by Amit Sachdeva: Is the DMart Ready business planned to integrate with the offline ASL store business under an omnichannel model?
p. 17
“there's no change in thinking. If the question is whether there is a plan to integrate AEL with ASL business, so there is no such plan.”
Anshul Asawa, page 17 of the filed PDF · View the filing
Management said the goal is to prove the DMart Ready model can be run profitably in 11 cities, having previously seen losses grow significantly with expansion.
Answered by Anshul Asawa
Asked by Latika Chopra: What KPIs does management track for e-commerce, and is profitability prioritized over scale?
p. 19
“as we've tried to expand into more and more cities and geographies, the -- of course, the number of customers acquired were larger, etcetera, but our losses also grew quite significantly.”
Anshul Asawa, page 19 of the filed PDF · View the filing
Management explained permanent hires are needed per new store while productivity initiatives and mechanization reduced non-permanent headcount growth.
Answered by Niladri Deb
Asked by Jignanshu Gor: Why did permanent employee count rise sharply while contractual employee growth slowed despite adding 85 stores?
p. 20
“we have driven productivity initiatives for the manpower in the stores as well as the warehouses. So those counts are inclusive of that.”
Niladri Deb, page 20 of the filed PDF · View the filing
Management said the NCD could be in addition to CPs for some time, aimed at reducing cost and interest rate risk of borrowing.
Answered by Niladri Deb
Asked by Jignanshu Gor: Is the planned Rs 1,000 crore NCD issuance additional to or a replacement of existing commercial paper?
p. 21
“This INR1,000 crores NCD has been approved for us to explore opportunities of reducing the cost of debt. For some time, it could be in addition to the CPs that we are holding.”
Niladri Deb, page 21 of the filed PDF · View the filing
Management said the model's requirement for clean land, regulatory approvals, and multi-year construction timelines is the real bottleneck, not capital or people.
Answered by Anshul Asawa
Asked by Manoj: What stops DMart from opening 100 stores a year given capital and people are not constraints?
p. 25
“It is just that typically the model that we have chosen takes a lot more time to build new stores.”
Anshul Asawa, page 25 of the filed PDF · View the filing
Management (Vikram Dasu) explained that exited cities had poor capacity utilization and that consolidation should improve throughput and reduce delivery complexity going forward.
Answered by Vikram Dasu
Asked by Jay Gandhi: Given the pullback in DMart Ready cities, why haven't cost structures like transport improved?
p. 32
“our capacity utilization, which is throughput and order density, was not as ideal as we hoped, they would be, right?”
Vikram Dasu, page 32 of the filed PDF · View the filing
Management said there is no plan for a full-fledged fresh portfolio currently, though pilots are underway in select stores.
Answered by Anshul Asawa
Asked by Devanshu Bansal: Are there plans to expand into fresh food categories given competitors' focus on this segment?
p. 34
“is there a plan to have a full-fledged fresh portfolio in DMart stores at this point of time? No. But we'll keep looking at opportunities which we can, deliver in the current store environment profitably.”
Anshul Asawa, page 34 of the filed PDF · View the filing
Management said the company avoids collecting offline data to keep the shopping experience simple and fast at checkout.
Answered by Anshul Asawa
Asked by Vivek: Why doesn't DMart collect customer data in offline stores despite building online data capability in DMart Ready?
p. 38
“We do not, take more time of the customer than is required. So, you are right from a quick checkout perspective -- from the perspective that we do not want to make shopping experience complex for the customer.”
Anshul Asawa, page 38 of the filed PDF · View the filing
Risks flagged
Quick commerce and e-commerce competition is drawing convenience-focused customers, particularly for lower basket sizes in dense metros.
p. 10
“I think what might be happening is that some of the customers would be preferring to buy from quick commerce because of the convenience of faster delivery, especially for the lower basket sizes.”
Anshul Asawa, page 10 of the filed PDF · View the filing
Older metro stores are reaching saturation with high throughput, limiting further same-store sales growth.
p. 7
“to some extent these stores are reaching a saturation point.”
Anshul Asawa, page 7 of the filed PDF · View the filing
E-commerce (AEL) business has experienced a growing EBITDA drain and net losses.
p. 5
“EBITDA declined by about 43%, so we had a bigger EBITDA drain of 84 bps, and PBT was about 24% lower, at a net loss of INR307 crore.”
Niladri Deb, page 5 of the filed PDF · View the filing
Rising wage costs from the wage code and general inflation are pressuring the cost base.
p. 13
“We are indeed seeing some inflation on account of the wage code and also general inflation, but the throughput increase at this point of time that we see from these stores is taking care of some of that.”
Anshul Asawa, page 13 of the filed PDF · View the filing
Contract labor and transport costs rose sharply in the e-commerce business due to low network density in exited cities.
p. 32
“our contract labor cost went up by 24% and transport by 34% or so, if you are alluding to some of the financials that we published for AEL.”
Vikram Dasu, page 32 of the filed PDF · View the filing
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