Avenue Supermarts, the company behind the popular DMart grocery stores, shared some exciting news on January 13. Their earnings report showed that they earned 17.5% more money this quarter compared to last year, bringing in Rs 15,565 crore. Their profit also grew by 6.5%, reaching Rs 785 crore.
However, there’s a downside: their profit margins, which indicate how much they keep from sales, fell. The EBITDA margin dropped to 7.9%, down from 8.5% last year. Similarly, their profit-after-tax (PAT) margin decreased from 5.5% to 5%. The same-store sales, for stores that have been open for two years or more, grew by 8.3%.
Neville Noronha, the company’s Managing Director and CEO, mentioned that they are seeing more discounts in the fast-moving consumer goods (FMCG) sector, especially in big cities, but the pressure has eased compared to the previous quarter.
In the first nine months of FY 2025, DMart’s sales rose by 21.5%. The company is also adapting to changing shopping habits, seeing more people prefer home delivery over picking up their orders. They are increasing their home delivery services, even in some towns where pick-up options are no longer available.
Additionally, Noronha announced that he won’t be continuing as CEO after his term ends in January 2026. The board has already appointed Anshul Asawa as the new CEO, who will take over on March 15, 2025.
What Do Analysts Think?
– Nuvama: They advise to “Hold” DMart shares but have lowered their target price from Rs 5,040 to Rs 4,212 because of pressure on profits from competition.
– Motilal Oswal: They continue to “Buy” DMart shares with a new target price of Rs 4,450, down from Rs 4,750. They expect slower growth in certain product categories and have adjusted their earnings forecasts downwards by 4%.
– ICICI Securities: They suggest a “Reduce” rating for DMart shares, with a target price of Rs 3,300. They are unsure about the company’s growth in the medium term and have cut their earnings estimates slightly.
(Disclaimer: The forecasts and views presented are those of individual analysts and do not reflect the views of the Economic Times.)
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