D’Mart Q3 Results looks promising

Q3 is the litmus test for the Retail and Consumer products industry in India. During this period, most of the popular festivals occur in India and the propensity to spend is higher than any other Quarter. The latest results of India’s second largest Grocery Retail chain confirms that India and Indians had a fantastic festive period this year.

The company reported that total Revenue for the quarter ended December 31, 2022 stood at Rs. 11,305 crore, as compared to Rs. 9,065 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q3FY23 stood at Rs.974 crore, as compared to Rs. 868 crore in the corresponding quarter of last year. EBITDA margin stood at 8.6% in Q3FY23 as compared to 9.6% in Q3FY22. Net Profit stood at Rs. 641 crore for Q3FY23, as compared to Rs. 586 crore in the corresponding quarter of last year. PAT margin stood at 5.7% in Q3FY23 as compared to 6.4% in Q3FY22.

Total Revenue for the nine months of FY 22-23 ending Dec. ‘22 stood at Rs. 31,496 crore, as compared to Rs. 21,746 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in 9MFY23 stood at Rs. 2,877 crore, as compared to Rs. 1,760 crore during 9MFY22. EBITDA margin stood at 9.1% in 9MFY23 as compared to 8.1% in 9MFY22. Net Profit stood at Rs.2,051 crore for 9MFY23, as compared to Rs. 1,150 crore in 9MFY22. PAT margin stood at 6.5% in 9MFY23 as compared to 5.3% in 9MFY22.

Commenting on the performance of the company Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said: “Q3 saw our revenues grow by 24.7% over the corresponding quarter of last year. FMCG and staples segment continued to outperform the general merchandise and apparel segments. Gross margin percentage decline over the corresponding quarter of last year is a reflection of this mix change. Discretionary non-FMCG sales did not do as well as expected in this quarter.” On the company’s fast growing format D’Mart Ready, the MD said, “We have further expanded our E-Commerce operations in 4 new cities while continuing to deepen our presence in the existing 18 cities. Our operations now span across 22 cities in India.”

D’Mart is also planning to enter the Pharmacy Retail business through one of its subsidiaries. It may be noted that Reliance Retail also owns NetMeds, an e-commerce platform that sells prescription medicines to customers. Reliance acquired NetMeds in 2020 during the peak Covid-19 period. The only formidable comparison and competition to D’Mart at the moment is Reliance Retail which is expected to cross Rs. 2 lakh Crores in annual turnover this FY. Reliance Retail’s Jio platform, which combines all the major (offline) formats operated by the company is competing in the super App space with Tata Neu.