Avenue Supermarts, which owns the hyper-retail chain DMart, on Saturday reported 16% rise in consolidated net profit at ₹447 crore in the December quarter as against ₹384 crore in December 2019.
Consolidated revenue of the Mumbai-based company rose 11% to ₹7,542 crore as compared to ₹6,808 crore in the year-ago period.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q3FY21 stood at Rs.689 crore, as compared to Rs. 597 crore in the orresponding quarter of last year. EBITDA margin stood at 9.1% in Q3FY21 as compared to 8.8% in Q3FY20.
On Friday, the company’s scrip on NSE closed 1.25% higher at ₹2,958.
On Wednesday, Avenue Supermarts briefly breached the ₹2 trillion market valuation after the stock surged nearly 17% in the last three weeks.
“The quarter has seen further improvement in our business and financial metrics. Our overall sales and sales mix is now trending very close to our usual times except for specific customer consumption changes post Covid-19. Apparel, laundry, footwear, travel and such relevant out of home usage categories are taking more time to recover,” said Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited.
“Agile OPEX management along with a good surge in festival shopping allowed us to deliver a significantly better quarter than the previous two quarters. However, December month didn’t trend as well as the festival months of October and November. Two years and older DMart stores did ~96% of December 2019 sales in the month of December 2020. We have 162 stores that are 2 years or older. Restricted store operations in certain cities post Diwali due to night curfews and weekend closure led to significantly larger declines in those stores versus same period last year.
There continues to be a distinct behaviour of doing shopping more efficiently by shoppers. Lesser trips and higher basket values continue to be the norm. While there is a general reduction in basket values compared to peak pandemic levels, they still continue to be relatively higher than pre Covid-19 levels. We also continue to face inconsistent supplies from the non FMCG sector. Raw material prices are also going up. Availability in certain categories is likely to get worse before getting better. This could therefore have an impact on sales mix and margins in the near term,” added Noronha.
“This quarter we soft launched DMart Ready in select pin codes of Ahmedabad, Bangalore and Hyderabad. In addition, at some of our brick and mortar stores we have leased some part of the space to Avenue E-Commerce Limited (AEL) to commence E-Commerce operations in those cities. Post Covid-19 environment is creating opportunities to launch DMart Ready in more cities. However, we will continue with our approach of small trials, reviews and controlled acceleration for DMart Ready,” said Noronha.