Key insights from the result:

  1. Avenue supermart revenue grew 22% (3% below consensus).
  2. PAT grew 51% to Rs3.4bn (6% above street est.) led by recent tax cuts. GM expanded 80bps YoY led by improving revenue mix;
  3. Management noted that revenue growth of 22% is behind internal expectations, but improvement in gross margins is encouraging

Outlook:

DMART’s operating growth continues to contrast with the broader consumer pack. In an environment of low inflation where most staple companies are taking price cuts – a 22% sales growth and a 73bp expansion in margins yoy shows the strength of the business model and their franchise.

D-Mart has shown best operating metrics both on driving better inventory turns as well as margins. It is also working on entering into long term lease model which should accelerate store expansions and add another growth lever.

Recent stock run-up may limit near term upside but long term opportunity still remains quite convincing given large market opportunity and D-Mart’s flawless execution.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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