Avenue Supermarts DMart , the operator of DMart retail chain, is set to announce its July-September quarterly results, with analysts projecting a mixed bag of growth and challenges. The company, known for its value retail format, is expected to show resilience in revenue growth while facing headwinds in profitability.

Revenue Growth and Store Expansion

Analysts anticipate DMart's revenue to rise by 15% year-on-year to Rs 16,617.85 crore. This growth is primarily attributed to the company's continued focus on store expansion. During the quarter, DMart added eight new stores, bringing its total count to 432, representing a 14% growth in its store base.

Profitability Under Pressure

Despite the expected revenue growth, DMart's profitability is likely to face challenges:

• EBITDA Margin: Expected to contract slightly to 7.5% from 7.6% in the previous comparable period.
• Net Profit: Projected to decline by 1.4% to Rs 650.33 crore.

Key Performance Indicators

Factors Impacting Performance

Several factors are contributing to the moderation in DMart's performance:

1. Weather Disruptions: Heavy rains during the quarter likely affected footfall and sales.
2. GST-Related Disruptions: Changes in GST regulations may have impacted operations.
3. Competitive Pressure: Rising competition from quick commerce players is challenging traditional retail formats.
4. Higher Operating Expenses: Increased costs are putting pressure on margins.

Segment Performance

• General Merchandise and Apparel: These segments are showing signs of weakness, potentially due to changing consumer preferences or economic factors.
• Same-Store Sales Growth: At 6.5%, it indicates subdued momentum despite the ongoing store expansion.

Analyst Insights

Brokerages note that DMart's sales per square foot growth has moderated to around 1% year-on-year, which is below the recent quarterly trends of 2-3%. This slowdown suggests that while the company continues to expand its footprint, it may be facing challenges in maintaining the same level of efficiency across its growing network of stores.

As DMart navigates through these challenges, investors and market watchers will be keenly observing how the company balances its expansion strategy with profitability in an increasingly competitive retail landscape.

Avenue Supermarts DMart , the operator of the DMart retail chain, reported impressive quarterly results, yet saw its shares decline in recent trading. Here's a breakdown of the key points:

Q2 Financial Highlights

Key Takeaways

• Record-Breaking Quarter: DMart achieved its highest second-quarter revenue in four years.
• Consistent Growth: The company maintained double-digit growth for the third consecutive year.
• Expanding Presence: DMart currently operates 432 stores across India.

Market Response

Despite the strong financial performance, DMart's shares experienced a 1.5% decline, closing at ₹4,350.00.

Looking Ahead

The Board of Directors is scheduled to meet on October 11 to approve the detailed financial results for the quarter and half-year period.

This quarter's performance underscores DMart's resilience and continued expansion in the competitive retail sector. The upcoming board meeting may provide further insights into the company's financial health and future strategies.