DMart Q2 results
Avenue Supermarts, the company behind the retail chain DMart, recently announced its financial results for the second quarter of the fiscal year 2023-24. The company’s consolidated net profit for this quarter amounted to Rs 623.35 crore, which represents a 9.09 percent decline compared to the net profit of Rs 685.71 crore reported during the same period in the previous fiscal year. Furthermore, the consolidated net profit also declined by 5.36 percent from the figure of Rs 658.71 crore recorded in the preceding quarter.
Regarding the standalone net profit, Avenue Supermarts faced a decline of 10.91 percent, reporting a figure of Rs 658.54 crore for the first quarter of the fiscal year 2023-24, in contrast to the Rs 730.4 crore recorded in the corresponding quarter of the previous year.
These results indicate a challenging period for Avenue Supermarts, possibly influenced by various market factors and operational challenges. The company may need to assess its strategies and make necessary adjustments to overcome these challenges and improve its financial performance in the upcoming quarters.
These results signify a challenging period for the company, possibly influenced by various market factors, operational challenges, or shifts in consumer behavior. Avenue Supermarts may need to assess its strategies to navigate through the changing market landscape and enhance its performance in the upcoming quarters.
Avenue Supermarts demonstrated substantial growth in its consolidated revenue from operations during the second quarter of the fiscal year 2023-24. The company reported an impressive 18.66 percent year-on-year (YoY) increase in consolidated revenue, amounting to Rs 12,624.37 crore, compared to Rs 10,638.33 crore in the corresponding period of the previous year. Additionally, this revenue also exhibited a growth of 6.39 percent from the preceding quarter when it was Rs 11,865.44 crore.
In terms of standalone total revenue for the quarter ending on June 30, 2023, the company posted an 18.51 percent YoY increase, reaching Rs 12,307.72 crore, compared to Rs 10,384.66 crore in the same period of the previous year.
This revenue growth suggests that Avenue Supermarts has been successful in increasing its top-line performance, even though it experienced a decline in net profit. The company may need to evaluate its cost structures and profit margins to enhance its bottom-line results and ensure that the growth in revenue translates into improved profitability.
The recent financial results for Avenue Supermarts, the company behind the retail chain DMart, indicate that while the revenue for the second quarter was largely in line with expectations, the net profit fell short of estimates provided by a poll of three brokerages.
According to the poll, DMart’s revenue for the second quarter was expected to be around Rs 12,592 crore, whereas the net profit was projected to be approximately Rs 675 crore. However, the actual net profit reported by the company for the quarter was lower than the estimated figure.
On the other hand, the company’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for Q2FY24 stood at Rs. 1,005 crore, showcasing an improvement from the EBITDA of Rs. 892 crore in the corresponding quarter of the previous year. However, the EBITDA margin for the same period saw a slight decrease, standing at 8.0 percent in Q2FY24 compared to 8.4 percent in Q2FY23.
This data suggests that while Avenue Supermarts experienced growth in its EBITDA, the decline in the EBITDA margin may indicate a need for the company to address cost structures and operational efficiency to sustain and improve profitability in the future.
Neville Noronha, the CEO and Managing Director of Avenue Supermarts Limited, highlighted that the company’s gross margins in the recent quarter remained lower in comparison to the corresponding period of the previous year. This decline was primarily attributed to the reduced contribution from the higher margin General Merchandise and Apparel business.
Furthermore, Noronha mentioned that the company expanded its operations by opening nine new stores during the quarter, leading to a total store count of 336. This expansion strategy reflects the company’s efforts to enhance its market presence and cater to a wider customer base.
On October 13, Avenue Supermarts’ stock on the National Stock Exchange closed at Rs 3920, registering a 1.48 percent increase from the previous day. This rise in the stock price might indicate positive investor sentiment, possibly driven by factors such as the company’s expansion plans and other strategic initiatives. Nevertheless, the company may need to address the challenges in its gross margins to ensure sustainable growth and profitability in the future.
