Shares slipped 1.8% to ₹3,521 as investors digested a 7.3% EBITDA margin, below the 7.7% consensus estimate and the 7.6% figure from the prior year.
The margin dip is attributed to higher wage‑inflation‑driven operating costs, a trend that Citi’s “sell” note highlights as a recurring theme in the last 14 quarters.
LFL growth, however, hit 9.5%, comfortably topping the 7.5% poll, and revenue stood at ₹19,206 crore, in line with expectations but still shy of the ₹19,200 crore forecast. Net profit was ₹803.6 crore, a drop from the ₹857.6 crore estimate, while EBITDA lagged at ₹1,403.2 crore versus the ₹1,492 crore poll.
The company opened 18 new stores in the first half of FY, 15 of which launched in Q2, bringing the total to 518. This modest expansion keeps the unit economics under review, as the multi‑quarter low unit EBITDA signals a softening productivity curve.
Analyst sentiment remains split: Citi has a sell rating with a ₹3,250 target; Bernstein and CLSA keep “outperform” and “high‑conviction outperform” ratings, setting targets at ₹5,000 and ₹5,723 respectively; Jefferies cuts its target to ₹4,000 while downgrading EPS estimates by 2–3%. The consensus price target suggests an upside of roughly 12.8% from current levels.
Looking ahead, the company’s next earnings call will likely focus on cost‑control measures and the pace of new store roll‑outs, while the broader retail sector watches for further wage‑inflation pressures that could compress margins across the board.