Avenue Supermarts, the company behind the popular retail chain DMart, saw its shares rise by over 4% in early trading today following a strong performance in the June 2024 quarter. The firm reported a 17.5% increase in consolidated net profit, with earnings climbing to Rs 773.8 crore from Rs 658.8 crore in the same period last year.
This positive result pushed the stock price up by 4.29% to Rs 5,166.10 on the BSE, with the market cap of the company reaching Rs 3.24 lakh crore. Revenue also saw a significant jump, rising by 18.6% year-on-year to Rs 14,069.1 crore in Q1 compared to Rs 11,865.4 crore in the previous year.
The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) for Q1FY25 rose to Rs 1,221.3 crore, up from Rs 1,035.3 crore in the same quarter last year. EBITDA margins also increased to 8.7% in Q1FY25, reaching Rs 13,712 crore compared to Rs 11,584 crore in Q1FY24.
Standalone net profit for the quarter also showed growth, increasing by 16.8% to Rs 812 crore compared to Rs 695 crore in the corresponding quarter of the previous year. Standalone total revenue saw a rise of 18.3% to Rs 13,712 crore in Q1 compared to Rs 11,584 crore in the same period last year.
Nuvama has revised its price target upwards to Rs 5,091 and maintained a ‘HOLD’ stance on the stock. The brokerage noted that DMart’s gross margin improved in Q1FY25, driven by the rise in contribution of General Merchandise & Apparel (GM&A). However, the brokerage also mentioned that store productivity remains below pre-COVID levels, despite adding six new stores in the quarter.
Amnish Aggarwal, Director of Research at Prabhudas Lilladher, assigned an accumulate call to the firm with a price target of Rs 5,104. Aggarwal highlighted that DMart’s results were in line with their estimates, indicating stabilization in operating parameters and growth in sales per store and sales per square foot.
DailyBubble’s perspective on the matter is that DMart’s performance in Q1FY25 demonstrates resilience and growth potential, especially with the company’s focus on expanding into Tier-2 and Tier-3 cities. The gradual uptick in store productivity and the addition of new stores show promise for future growth and profitability. Investors should consider consulting with a qualified financial advisor before making any investment decisions.