Avenue Supermarts net profit rises 17%; DMart Share Price Surges

For the October-December quarter of the fiscal year 2023-24, Avenue Supermarts the retail giant behind the popular DMart chain has shown robust growth. Consolidated net profit has surged by 17% reaching ₹690.61 cr compared to ₹589.68 cr in the same period last year.

Dmart Q3 Result

Avenue Supermarts has reported a 17.31% rise in consolidated revenue from operations to ₹13,572.47 cr in Q3FY24 compared to ₹11,569.05 cr in the same period last year EBITDA stood at ₹1,120 cr, reflecting an improvement from ₹965 cr in the corresponding quarter of the previous year. EBITDA margin has maintained at 8.3%, consistent with Q3FY23. EPS for the December quarter saw an increase reaching ₹10.62 compared to ₹9.10 in the year ago period.

During the December quarter, Avenue Supermarts added five new stores to its network. With this addition, the total number of DMart stores now stands at 341. The expansion efforts are in line with the company's strategy to cater to diverse markets.

Total expenses for the quarter, including finance costs, amounted to ₹12,656.46 crore, compared to ₹10,789 crore in the same period last year. Staff expenses have also increased from ₹192.31 crore to ₹234.31 crore.

After announcing Q3 results, DMart's stock opened higher at ₹3,928 but later dropped, at the time of writing stock is trading at ₹3,866. In the past month, stock declined by 4.42%. Over the past 6 months it rose by 4.13% and last year it rose by 5.13%. However looking at the bigger picture over the last 5 years stock of DMart rose 179.60%.

DMart shares have remained steady in the last three months (around ₹3,850-₹3,862). Despite this analyst suggests the current dip as a potential buying opportunity anticipating that the stock could reach ₹4,200 within the next three to six months.

Management Commentary

CEO Neville Noronha announced a 17.2% revenue growth in Q3 FY 2024 compared to the same period last year. Contributions from general merchandise and apparel stabilized, showing positive post-Diwali trends. However, festive season sales were lower than expected in non-FMCG. In the FMCG sector, agri-staples (excluding edible oil) faced considerable inflation challenges, according to Noronha.

Final Words

Avenue Supermarts backed by Radhakishan Damani showed strong financials in Q3FY24. DMart's strategic store expansion, financial discipline, and adaptability to market changes position it for future growth. Positive post-Diwali trends and the CEO's optimistic outlook highlight DMart's resilience in navigating retail challenges and seizing opportunities.