Profit up 32%, inflation hurts company mix

Avenue Supermarts Ltd., the operator of the DMart chain of stores, reported lower-than-expected earnings for the October-December quarter.

The company’s net profit rose 32% sequentially to Rs 552.53 crore in the quarter ended December, according to its stock market filing. That compares to a consensus estimate of Rs 603 crore, according to analysts tracked by Bloomberg.

Margins were in line with projections, although management at the company founded by Radhakrishna Damani said inflation hurt business in the quarter.

Other highlights (QoQ)

  • Revenue increased by 18% to Rs 9,217.76 crore from estimated Rs 9,312.83 crore.

  • Operating profit increased by 30% to Rs 866.46 crore, against a forecast of Rs 882.7 crore.

  • The operating margin was 9.4% against 8.6%. Analysts had expected an operating margin of 9.5%

In the third quarter, the company added 17 stores, its highest level in seven quarters. The total number of stores as of December 31 was 263.

“Overall gross margins are slightly lower due to the deterioration of the mix,” said Neville Noronha, CEO and Managing Director of Avenue Supermarts Ltd. do better,” he said.

Going forward, Noronha expects sales and attendance to remain dependent on local regulations. “We continue to take every precaution to ensure that every buyer, employee and partner operates in a safe environment,” Noronha said.

Comments are closed.