the latest financial insights as D-Mart’s Q2 profits dip by 9.1%, despite an impressive 18.7% surge in revenue. Dive into the details of Avenue Supermarts Limited’s performance, shedding light on the challenges and successes of one of India’s leading retail giants.
D-Mart
Avenue Supermarts Limited, the parent company of D-Mart stores, recently released its financial results for the second quarter of FY24, showcasing notable developments in their performance. While the company reported a significant 18.7% surge in revenue, it simultaneously faced a 9.1% decline in profit. These results offer an intriguing insight into the retail landscape and the challenges faced by one of India’s leading supermarket chains.
During the second quarter of FY24, Avenue Supermarts Limited recorded revenue from operations amounting to INR 12,624.37 crore, demonstrating a substantial 18.7% increase compared to INR 10,638.33 crore in the same quarter of the previous fiscal year. This impressive revenue growth is a testament to the brand’s continued popularity among consumers.
However, the news was not all positive for the company’s bottom line. Despite its remarkable revenue surge, Avenue Supermarts Limited reported a profit of INR 623.56 crore for the quarter ending in September 2023, reflecting a 9.1% drop from the INR 685.77 crore profit achieved in the same quarter of FY23. The decline in profit suggests that while the company is maintaining its strong market presence, it may be grappling with challenges in terms of profitability.
Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) for Q2FY24 amounted to INR 1,005 crore, up from INR 892 crore during the corresponding quarter of the previous year. However, the EBITDA margin for the quarter was slightly reduced, standing at 8.0% compared to 8.4% in Q2FY23. This could be indicative of the increased costs or changes in the business model that the company is managing.
Basic earnings per share (EPS) for Q2FY24 landed at INR 9.58, as opposed to INR 10.58 for Q2FY23. This dip in EPS indicates a potential decrease in the overall profitability of the company during this period.
Breaking down the financials, the company posted a total income of INR 12,661.29 crore, while the total expenses incurred in the quarter amounted to INR 11,809.35 crore. This highlights the challenges in managing expenses even as revenue increases.
In the broader context of the first half of FY24, Avenue Supermarts Limited reported a total revenue of INR 24,490 crore, a notable increase from INR 20,676 crore in the same period the previous year. However, the company’s net profit for H1FY24 stood at INR 1,282 crore, down from INR 1,329 crore in H1FY23. These results suggest that the company is experiencing a dynamic period of growth while also dealing with profitability concerns.
Neville Noronha, the CEO and Managing Director of Avenue Supermarts Limited, noted, “Q2 FY 2024 saw revenue growth of 18.5% compared to the corresponding quarter of last year. Our gross margins continue to be lower compared to the same period in the previous year due to a reduced contribution from the higher-margin General Merchandise and Apparel business. We opened nine new stores during the quarter, taking our total store count to 336.”
D-Mart, a prominent supermarket chain known for offering a wide range of home and personal products under one roof, initially opened its doors in Mumbai in 2002. As of September 30, 2023, it operates 336 stores with a total retail area spanning 13.9 million square feet, catering to consumers across multiple states in India, including Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh, and Punjab.
This financial performance reflects the ever-evolving landscape of the retail industry and the strategic choices made by D-Mart as it continues to expand its presence across India.
aslo read Bussiness