D- Mart rallies 3.7% on the back of stellar Q1 performance

D- Mart rallies 3.7% on the back of stellar Q1 performance

by 5paisa Research Team Last Updated: 2022-07-11T15:23:37+05:30

The supermarket brand reports a solid 95% jump in revenues in Q1FY23.

Avenue Supermart, the supermarket chain under the brand name “ DMart” reported stellar performance for the first quarter of FY 22-23. The financial metrics showed exponential growth on a YoY basis.

Standalone PAT grew 490.3% or 5x at Rs 680 crore as compared to Rs 115 crore in the corresponding quarter of last year. PAT margin stood at 6.9% in Q1FY23 as compared to 2.3% in Q1FY22.

Total Revenue for the quarter ended June 30, 2022, stood at Rs 9,807 crore, as compared to Rs 5,032 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q1FY23 stood at Rs 1,008 crore, as compared to Rs 221 crore in the corresponding quarter of last year. EBITDA margin stood at 10.3% in Q1FY23 as compared to 4.4% in Q1FY22.

The company witnessed growth across all financial parameters, however, YoY growth was largely attributable to the lower base effect (Q1FY22 was affected by second Covid wave). The quarter was significant as the first full quarter of zero disruption from the Covid-19 pandemic.

The company opened its first store in Mumbai in 2002. At the end of Q1 2023, D-Mart has 294 stores with a Retail Business Area of more than 12.1 million sq ft (approx) across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab.

One of India’s largest retailers, D-Mart is the preferred supermarket of lower-middle, middle, and transitioning middle to upper-middle-income consumers. Its brick-to-mortar stores are always bustling with customers. By the end of October 2020, it has also forayed into online business to cope with the lockdown restrictions and limited mobility of the public. DMart Ready in Q1FY23 continued to deepen its presence across 12 cities in India.

The company sees humongous potential on both sides, offline as well as online. However, in the current inflationary scenario, the company has yet not reached the pre- Pandemic level in discretionary categories.

“Value growth through positive volume growth of discretionary products in relatively older stores is the best reflection of the strength of the DMart business, competitive impact and the local economy. We have made good progress in this area during the quarter. We will need another quarter of uninterrupted operations to understand this better.”, said Neville Noronha, CEO & Managing Director, Avenue Supermarts.

The company is currently trading at very rich valuations of 117x Price to Earnings ratio.

The shares of Avenue Supermarts were quoted at Rs 4005.05 up by 1.61% on Monday, July 11, 2022, at 2.45 pm. 

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