The concept of high margins being the ultimate goal for businesses is often debunked by companies that thrive with single-digit margins. Scale, operating leverage, and business models built for massive volumes can turn slim spreads into strong earnings. This is evident in the cases of Dixon Technologies, Avenue Supermarts, and Blue Star, which have consistently delivered profits despite having low margins.
Dixon Technologies, a contract manufacturer, works on razor-thin spreads but has seen its revenue nearly double to ₹12,836 crore in the first quarter of FY26. Its high-volume, capital-efficient model keeps profits on a steady climb, with Ebitda rising 89% year-on-year to ₹484 crore. The company’s diversified portfolio across mobiles, TVs, appliances, and lighting allows profits to scale rapidly, with return on equity (RoE) at 49% and return on capital employed (RoCE) at 34%.
Avenue Supermarts, on the other hand, operates on a simple philosophy of selling at the lowest price and letting volumes do the heavy lifting. The company’s consolidated revenue in the June 2025 quarter (Q1FY26) was ₹15,932 crore, up from ₹13,712 crore in the same period last year. Despite thin spreads, DMart’s value proposition lies in turning inventory rapidly and maintaining tight control over costs. The company sold its inventory in just 31 days, but paid suppliers after only 7 days, demonstrating rapid inventory turnover.
Blue Star, a diversified cooling solutions player, benefits from operating across B2C and B2B segments. The company’s revenue in Q1FY26 rose 4% to ₹2,982 crore, driven by demand from factories and data centres. Although the company’s margins narrowed to 6.7% from 8.3%, its return on equity (RoE) and return on capital employed (RoCE) remain robust at 21% and 36%, respectively.
The journeys of these companies show that profitability is not always about commanding high margins. Scale, efficiency, and disciplined execution have allowed them to generate healthy earnings and strong returns. For investors, the lesson is clear: single-digit margins do not always equate to weak businesses. What matters is how effectively revenues are converted into absolute profits and shareholder returns. These companies have successfully leveraged their business models to deliver strong earnings, despite having low margins, and have demonstrated that there is more to profitability than just high margins.