Earlier this month, billionaire Radhakrishan Dhamani-backed company’s standalone revenue from operations rose 18.5 per cent to ₹12,308 crore in the second quarter of current fiscal. 

The company added nine stores during the quarter-under-review, taking the total number of stories to 336 during the quarter ended September 30.

Avenue Supermarts had registered a revenue from operations of ₹7,649.64 crore in the July-September quarter in the previous fiscal 2022-23, said the company in a regulatory filing to the stock exchanges.

“Standalone Revenue from operations for the quarter ended September 30, 2023, stood at ₹12,307.72 crore,” said Avenue Supermarts in the regulatory filing while sharing the company’s update at the end of the quarter.

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Revenue to clock double-digit growth; grocery sales to lead 

According to domestic brokerage firm Kotak Institutional Equities, the company’s consolidated gross margin is expected to come in at 14.4 per cent and EBITDA margin is seen at 8.2 per cent, down 60 basis points (bps) on a sequential basis, on account of unfavourable seasonality.

Brokerages and analysts remain optimistic of the retail company’s net sales and revenue growth – both numbers expected to clock a double-digit growth in the September quarter. Net profit is likely to drop in the range of three-to-five per cent on the slowdown in the industry. The grocery segment of India’s retail industry is expected to register recovery led by DMart with a rise of 19 per cent in net sales, according to domestic brokerage Centrum Broking. 

‘’Demand trend for our retail coverage universe remained moderate. Till last quarter, companies catering to mid-premium and premium segment outperformed its other counterparts. We expect similar trend to continue albeit at a slower pace,” said Centrum Broking. Grocery segment is expected to register recovery led by DMART (+19 per cent).

‘’We maintain our stance that retailers targeting value for money customers will struggle to grow. DMART though registered sales growth of 19 per cent on year-on-year (YoY) basis, large part of the growth is on account of healthy retail footprint expansion (+11 per cent),” said Centrum Broking.

In the April-June quarter, the company reported just a 2.3 per cent YoY rise in its net profit to ₹695.36 crore, compared to ₹680 crore in the year-ago period. Notably, Avenue Supermart’s revenue has witnessed triple-digit growth of 202.21 per cent since the first wave of the pandemic in 2020.

Also Read: DMart may be an attractive long-term bet; here’s why Motilal Oswal is upbeat about the stock

Additionally, domestic brokerage Motilal Oswal also observed that DMart Ready, the online shopping platform, has expanded its footprint to 22 cities with store metrics that are close to breakeven. It operates on the next-day delivery model, unlike other quick-service e-grocers, which have lower fill rates and delivery sizes, mostly catering to daily needs instead of monthly grocery orders.

The retail chain is promoted by Radhakishan Damani and his family and focuses on selling basic home and personal products across markets including Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan. On Friday, October 13, shares of Avenue Supermarts settled 1.78 per cent higher at ₹3,932.75 apiece on the BSE.

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Updated: 14 Oct 2023, 06:17 AM IST