InvestorQ : Is the quarterly numbers of D-Mart a sign of turnaround in retail in second quarter?
sarah Leo made post

Is the quarterly numbers of D-Mart a sign of turnaround in retail in second quarter?

Answer
image
Rashi Mehra answered.
1 month ago
Follow

Avenue Supermarts, the owner of the D-Mart brand, reported 36.6% growth in sales for Q2FY23 at Rs10,638 crore consolidated with 5.98% sequential growth. For H1FY23, revenues grew 59.2% to Rs20,192 crore. D-Mart group has persisted with its Everyday Low Cost – Everyday Low Price (EDLC-EDLP) strategy. This essentially entails squeezing suppliers for deep discounts and passing on big discounts to end customers via easy access. Under product categories, the FMCG and staples did much better than general merchandise and apparel as inflation hit price point products most. Here is a gist of financials.

Avenue Supermarts

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 10,638

₹ 7,789

36.58%

₹ 10,038

5.98%

Operating Profit (Rs cr)

₹ 730

₹ 553

32.12%

₹ 864

-15.45%

Net Profit (Rs cr)

₹ 686

₹ 418

64.14%

₹ 643

6.66%

Diluted EPS (Rs)

₹ 10.50

₹ 6.40

₹ 9.85

OPM

6.86%

7.09%

8.60%

Net Margins

6.45%

5.36%

6.40%

PAT for September 2022 quarter was up 64.2% at Rs686 crore. There is an exceptional gain in this story. Apart from cost controls and inventory efficiency in the quarter, D-Mart also gained from a Rs141 crore tax credit it received in the quarter, which helped net profit surge. This is despite operating profits growing at par with sales growth. D-Mart net margins stay much higher than the median for the retail industry.

3 Views