Avenue Supermarts, which is known under the brand name DMart reported strong earnings in the first quarter of the financial year 2022-23 (Q1FY23). The retail chain company registered triple-digit growth in profit, while double-digit growth in revenue according to the company’s exchange filing.
The net profit of DMart surged around five-fold at Rs 680 crore for Q1FY23, as compared to Rs 115 crore in the corresponding quarter of last year. While total revenue for the June-end quarter of FY23 gained nearly 95per cent to Rs 9,807 crore against Rs 5,032 crore in the same period last year.
The company’s EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) grew almost four-fold to Rs 1008 crore in Q1FY23 against Rs 221 crore in the corresponding quarter of last year. Similarly, the EBITDA margin of DMart spurted by 10.3 per cent from 4.4 per cent year-on-year.
There has been a very good recovery of overall sales in Q1FY23, however, this quarter’s performance is not comparable to the same period last year due to the Covid-19 second wave, Neville Noronha, CEO & Managing Director, Avenue Supermarts said in the business overview.
The company cumulatively opened 110 stores over the last 3 financial years which never got an opportunity to operate in normal circumstances over the last 2 years, the management said, adding that these stores have larger, better designed, and have the capacity to handle the larger scale of revenue.
This is the first full quarter of zero disruption from the Covid-19 pandemic, Noronha said, adding that “Q1 like Q3 is a good revenue as well as profit-enhancing period due to back to school/college season and the onset of the monsoons.
General Merchandise and Apparel categories saw relatively better traction than the previous quarter but still have some overhang of the Covid-19-led disruptions and acute inflationary impact, the MD and CEO of Avenue Supermarts further stated in his comment.
“Our discretionary contribution mix of this quarter is yet to reach the pre-pandemic levels but is getting better. High inflation over the last two years hides the possible stress in volume growth for discretionary categories of mass consumption,” he added.