Avenue Supermarkets owned D’Mart, among India’s largest retail chains by turnover announced 22% growth in revenue for Q3 FY 21-22 which stood at Rs. 9,065 Cr as compared to Rs. 7,433 Cr during the same period last year and EBITDA grew 25.6% to Rs. 868 Cr from Rs. 691 Cr last year, same period in a BSE filing to the stock exchanges and retail investors. The company added 17 stores this quarter of the 29 stores which have been added since Apr. ’21 taking the total tally to 263 stores spread over 10.3 mn sft. For the 9-month period in FY 21-22, revenues grew a whopping 31.9% from Rs. 16,484 Cr to Rs. 21,746 Cr while EBITDA for the same period moved 56.4% to Rs. 1,760 Cr from Rs. 1,125 cr. The EBITDA margin also improved significantly from 6.8% to 8.1%.
Net profit for the retail chain eponymous for being among the only profitable retail businesses in India at this scale and size grew 57.4% to Rs. 1,150 Cr during first nine months of FY 21-22 from Rs. 730 Cr during the same period last year and the actual margin grew from 4.4% to 5.3%.
Commenting on the performance of the company Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said “Revenue in the DMart stores grew by 22.0% in this quarter over the corresponding quarter of last year. Overall gross margins are marginally lower due to mix deterioration. General merchandise and apparel business is consistently seeing relatively lesser sales contribution while essentials and FMCG is doing better. Inflation and lesser opportunities to go out are negatively impacting certain categories more than others. We are seeing higher inflation as an opportunity to make our buying more efficient, our assortment sharper and continue to keep our costs low. Considering the current Covid wave, our sales and footfalls will be dependent on local regulations. We continue to take all precautions to ensure every shopper, employee and partner is operating in a safe environment”.
DMart is considered a pioneer and the industry leader when it comes to managing customer expectations though offering the right merchandise appropriate for each store location at competitive prices. The company has a wholesale cum retail model, where shopkeepers who wish to resell can purchase products including household items, grocery, staples, frozen and diary products, fruits & vegetables, bed, bath, crockery, footwear, toys, etc. and of course apparel for men, women and children. The company which buys the property where it operates has built a significantly different model. by running large format stores, mostly in Tier 2/3 towns where the operating costs are low, e-commerce prevalence is at its lowest and most importantly, is able to showcase “value for money” to consumers than mere discounting on MRP. Despite aggressive competition from Amazon, Flipkart, Jio Mart and other last mile logistics players like Swiggy and Dunzo, DMart has maintained its attraction to draw customers to stores even in markets where it lags behind when it comes to e-commerce and home delivery. This is a significant achievement, given the fact how the new age investor-led companies are throwing money in the ocean to recruit new and first time users.
When DMart performs well, it’s not just the investors who get happy but also fellow retailers across categories and the entire consumer business ecosystem as a lot hinges on how the company operates in this aggressively competitive space, especially where it involves day today consumption products and FMCG.