Avenue Supermarts (DMART) posted another weak set in 1QFY26 as standalone EBITDA grew 8% YoY (5% miss) due to weaker gross margin (GM; -25bp YoY) and higher cost of retailing (CoR; up 9% YoY on a per sqft basis). Standalone revenue grew ~16% YoY, driven by ~14% store area addition. Like-for-like (LFL) growth for over two-year-old stores moderated to 7.1% (vs. 8.1%/9.1% in 4QFY25/1QFY25) due to deflation. DMART added 9 stores in 1QFY26 (vs. 6 in 1QFY25). Acceleration in the pace of store additions continues to be the primary growth driver for DMART. GM contracted ~27bp YoY to 14.6% (~25bp miss) due to ~15bp YoY decline in the share of the higher-margin GM&A category and continued heightened competition in the FMCG category.