DMart Q3 Results: Profit, Revenue Up But Miss Estimates, Margin Contracts
D-Mart's Q3 revenue rose, but missed estimates, as high inflation continued to hurt demand for discretionary categories.
Avenue Supermarts Ltd.'s third-quarter revenue rose, but missed estimates, as high inflation continued to hurt demand for discretionary categories.
Consolidated revenue for the operator of the DMart chain of hypermarkets rose 25% over the previous year to Rs 11,569 crore in the three months to Dec. 31, according to an exchange filing. That compares to the Rs 11,632.1-crore consensus estimate of analysts tracked by Bloomberg.
Sequentially, it rose 9% from Rs 10,638.33 crore.
Avenue Supermarts Q3 FY23 Key Highlights (YoY)
Net profit rose 7% to Rs 589.64 crore, missing analysts' estimates of Rs 699.32 crore. Sequentially, it fell 14%.
Operating profit rose 11% to Rs 965.26 crore against an estimated Rs 1,073.73 crore. It rose 8% over the September quarter.
Margin came in at 8.3% against 9.4% due to higher expenses. It was lower than 8.4% in Q2 FY23.
Total expenses rose 27% to Rs 10,788.86 crore. Expenses were up 9% over the previous quarter.
DMart's revenue growth slowed in the third quarter due to uneven recovery of stores on a revenue-per-square feet basis and consumption failing to keep pace with expectations after a buoyant festive season.
Citing its channel checks, brokerage firm Motilal Oswal said the company has taken price hikes between 3% and 6% in the staple segment in Q3. "These hikes should have supported the overall revenue growth as the continued soft performance in the value segment may have hurt the 'non-staple' category, which contributes 25-30% of the revenue pie," it said.
"FMCG and staples segment continued to outperform the general merchandise and apparel segments," said Chief Executive Officer and Managing Director Neville Noronha.
Gross margin percentage decline over the corresponding quarter of last year is a reflection of this mix change. Discretionary non-FMCG sales did not do as well as expected in this quarter, he added.
The Radhakishan Damani-owned hypermarket chain added four stores during the quarter, taking the total to 306.
The results were announced on a market holiday.
Shares of Avenue Supermarts declined 8.07% over the past month against a flat benchmark NSE Nifty 50 Index.