Avenue Supermarts Limited , the parent company of D-Mart retail chain, has announced the opening of a new store in Chirala, Bapatla district of Andhra Pradesh. This expansion marks a significant milestone for the company, bringing its total store count to 433.

Store Opening Details

The company officially informed the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) about the store opening. The notification was made through the Company Secretary & Compliance Officer, Ashu Gupta.

D-Mart's Expansion Strategy

This new store opening aligns with Avenue Supermarts' ongoing strategy to expand its retail presence across India. The company's choice of Chirala, a town in the Bapatla district of Andhra Pradesh, demonstrates its focus on penetrating smaller cities and towns, potentially tapping into new market segments.

Impact on Retail Landscape

The expansion of D-Mart's network to 433 stores underscores the company's commitment to growth and its confidence in the Indian retail market. This move is likely to strengthen Avenue Supermarts' position in the competitive retail sector, particularly in the southern region of India.

Financial Performance

While specific financial details of this particular store opening were not disclosed, Avenue Supermarts recently published its financial results. The company reported robust performance, with key highlights as follows:

The significant year-over-year growth in both total income and net profit suggests that Avenue Supermarts' expansion strategy, including new store openings like the one in Chirala, may be contributing positively to the company's financial performance.

Conclusion

The opening of the new D-Mart store in Chirala represents Avenue Supermarts' continued commitment to expanding its retail footprint across India. As the company reaches the milestone of 433 stores, investors and market watchers will likely keep a close eye on how this growth strategy translates into financial performance in the coming quarters.

Avenue Supermarts DMart , the parent company of retail chain DMart, has reported mixed financial results for the second quarter. The company saw significant revenue growth but experienced pressure on margins and modest profit growth.

Financial Highlights

Key Takeaways

1. Revenue Growth: Avenue Supermarts reported a 15.50% year-on-year increase in revenue, reaching ₹166.76 billion.

2. Profit Growth: The company's consolidated net profit saw a modest increase of 3.80% year-over-year, reaching ₹6.85 billion.

3. EBITDA Performance: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 11.00%, from ₹10.90 billion to ₹12.10 billion.

4. Margin Pressure: The EBITDA margin declined by 30 basis points, dropping from 7.60% to 7.30%.

5. Operational Metrics: Revenue per store increased by 1%, while bill cuts rose by 14%.

6. Business Mix: The company's revenue mix remained stable with Foods at 57% and Non-Foods at 43%.

7. Geographic Presence: DMart shut operations in five cities and now operates in 19 cities.

Analyst Perspectives

• HSBC maintained a 'Reduce' rating with a price target of ₹3,700, citing elevated operating expenses and the decline in EBITDA margin.
• Morgan Stanley kept an 'Equal-Weight' rating with a ₹4,552 target, describing the quarter as a 'miss' with results 7% and 14% below estimates for EBITDA and PAT respectively.
• Like-for-like growth moderated to 6.80%, marking a 10-quarter low.

Market Response

Shares of Avenue Supermarts closed 0.53% higher at ₹4,328 and have gained 22% year-to-date.

The financial results indicate that Avenue Supermarts has maintained its growth trajectory in terms of revenue, but faces challenges in profit growth and margin maintenance. The company's ability to increase its top line by 15.50% suggests strong sales performance, possibly driven by new store additions and increased footfall. However, the slower growth in net profit compared to revenue might indicate increased operational costs or competitive pressures affecting profitability.

The decline in EBITDA margin, although marginal, may warrant attention from investors and analysts. It could potentially reflect challenges in maintaining operational efficiency or increased expenses in the face of rapid revenue growth. The closure of operations in five cities also suggests a strategic realignment of the company's geographic presence.

As Avenue Supermarts continues to navigate the retail landscape, these results provide insights into its financial health and operational performance. Investors and market watchers will likely keep a close eye on how the company manages its growth, profitability, and expansion strategies in the coming quarters.