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.

Avenue Supermarts Ltd, the company behind the popular D-Mart retail chain, has raised ₹100 crore in short-term debt through the issuance of commercial paper. The commercial paper, issued on September 30, 2025, will mature after 91 days on December 29, 2025, and bears a coupon rate of 6%. The company has stated that the commercial paper is proposed to be listed on the BSE and has a credit rating of ‘ICRA A1+’.

In addition to this, Avenue Supermarts has also announced the opening of a new D-Mart store in New Delhi, located at Epicah Mall & Business Centre, Moti Nagar. This new store brings the total number of D-Mart stores to 431 as of the current date. D-Mart is a popular retail chain that sells basic home and personal products across various markets in India, including Maharashtra, Gujarat, Andhra Pradesh, and several other states.

The company, promoted by Radhakishan Damani and his family, has been expanding its presence in the Indian retail market. The issuance of commercial paper is a common practice among companies to raise short-term funds for their business operations. The credit rating of ‘ICRA A1+’ indicates that the company has a strong creditworthiness and is capable of repaying its debts on time.

Avenue Supermarts’ decision to open new stores and raise funds through commercial paper suggests that the company is confident about its growth prospects and is looking to expand its business further. The retail industry in India is highly competitive, and companies like D-Mart need to continuously innovate and expand their offerings to stay ahead of the competition. With its strong brand presence and wide range of products, D-Mart is well-positioned to continue its growth trajectory in the Indian retail market.