Avenue Supermarts (DMART) Share Price in Focus on Monday; Quarterly Revenue Grows 17%

Avenue Supermarts (DMART) Share Price in Focus on Monday; Quarterly Revenue Grows 17%

Avenue Supermarts Ltd, which operates the popular D-Mart retail chain, reported a 4.8% rise in its consolidated net profit for the third quarter of FY25, reaching Rs 723.54 crore. The company’s revenue from operations saw a significant 17.68% increase to Rs 15,972.55 crore, supported by consistent same-store sales growth and a strong performance in its e-commerce segment, DMart Ready. Despite these gains, rising operational costs and intensified FMCG discounting pressured profit margins, which stood at 4.5%, down from 5.1% a year ago. With 387 operational stores as of December 2024, D-Mart remains a dominant force in India’s retail landscape.

Financial Performance Overview

Net Profit Growth
Avenue Supermarts posted a consolidated net profit of Rs 723.54 crore for Q3 FY25, a 4.8% increase compared to Rs 690.41 crore in the same quarter last year.

Revenue Expansion
The company’s revenue from operations surged 17.68% to Rs 15,972.55 crore, up from Rs 13,572.47 crore in Q3 FY24, demonstrating robust growth in its retail business.

Pressure on Margins
Profit margins faced challenges due to higher expenses and intensified discounting in the FMCG category. The PAT margin declined to 4.5% in Q3 FY25 from 5.1% in Q3 FY24.

Operational Metrics and Expenses

Total Expenses
Avenue Supermarts reported an 18.52% increase in total expenses, which amounted to Rs 15,001.64 crore for the quarter, driven by inflationary pressures and increased operational costs.

Same-Store Growth
The two-year and older stores recorded a same-store revenue growth of 8.3%, indicating continued consumer loyalty despite competitive pressures.

DMart Ready: E-commerce Gains Momentum

Online Growth
DMart Ready, the company’s online grocery delivery service, witnessed a 21.5% growth in revenue during the first nine months of FY25.

Home Delivery Dominates
CEO Neville Noronha highlighted the increasing preference for home delivery over pick-up points. Home delivery now contributes significantly more to DMart Ready’s sales.

Selective Delivery Channels
In certain towns, the company has streamlined operations to focus exclusively on home delivery, ensuring better alignment with consumer demand dynamics.

Store Expansion and Business Presence

Store Network
As of December 31, 2024, Avenue Supermarts operated 387 stores with a total retail area of 16.1 million sq. ft., marking a consistent expansion in its physical presence.

Geographic Reach
The company’s footprint spans key markets across India, including Maharashtra, Gujarat, Karnataka, Tamil Nadu, Telangana, and the NCR, reinforcing its pan-India presence.

Challenges and Opportunities

FMCG Discounting Pressures
The intense discounting in the FMCG category has impacted high-turnover metro stores, though its effects have reduced compared to the previous quarter.

Retail and E-commerce Synergy
With DMart Ready’s growing importance, Avenue Supermarts continues to blend its physical retail and e-commerce channels to cater to diverse consumer needs, capitalizing on India’s evolving grocery retail dynamics.

Promoter Legacy and Market Leadership

Promoter Leadership
Promoted by Radhakishan Damani and his family, Avenue Supermarts has established itself as a leader in India’s retail sector, offering a wide range of basic home and personal products.

Strategic Focus
The company’s strategic emphasis on cost efficiency, consumer-focused offerings, and a balanced approach between offline and online channels positions it for sustained growth in the competitive retail landscape.

General: 
Companies: 
Regions: