D-Mart Q1 profit jumps six-fold to Rs 642.89 cr, sales almost double

Avenue Supermarts Ltd, which owns and operates retail chain D-Mart, on Saturday reported over six-fold jump in its consolidated net profit to Rs 642.89 crore for the quarter ended on June 30, 2022, helped by a "very good recovery" in overall sales and a comparative low YoY base.

The company had posted a net profit of Rs 95.36 crore in the April-June quarter a year ago, said Avenue Supermarts in a BSE filing.

Its revenue from operations was up 93.66 per cent to Rs 10,038.07 crore during the quarter under review against Rs 5,183.12 crore in the corresponding quarter last fiscal.

According to the Damani family-promoted supermarket chain, its Q1FY23 results are not comparable with the corresponding quarter of the last fiscal, which was impacted by the second wave of Covid-19.

Commenting on the results, Avenue Supermarts CEO & Managing Director Neville Noronha said, "There has been a very good recovery of overall sales. However, this quarter's performance is not comparable to the same period last year due to the second wave of Covid-19 during that time."

Avenue Supermarts' total expenses were at Rs 9,191.79 crore, up 81.03 per cent in Q1/FY 2022-23, as against Rs 5,077.22 crore of the corresponding quarter.

While talking about the growth of DMart in the brick and mortar segment in April-June, Noronha said: "We cumulatively opened 110 stores over the last three financial years which never got an opportunity to operate in normal circumstances over the last two years. These are stores that are larger, better designed and have the capacity to handle a larger scale of revenue. These stores have done extremely well in this quarter."

D-Mart added 10 stores in the April-June quarter of 2022-23.

This is also the first full quarter of zero disruption from the Covid-19 pandemic.

"Q1 like Q3 is a good revenue as well as profit-enhancing period due to back to school/college season and the onset of monsoons," he said.

Its general merchandise and apparel categories saw relatively better traction than the previous quarter but still has some overhang of the Covid-19-led disruptions and acute inflationary impact.

"Our discretionary contribution mix of this quarter is yet to reach the pre-pandemic levels but is getting better. High inflation over the last two years hides the possible stress in volume growth for discretionary categories of mass consumption," he said, adding that "value growth through positive volume growth of discretionary products in relatively older stores is the best reflection of the strength of the DMart business, competitive impact and the local economy".

Its e-commerce business DMart Ready also continued to deepen its presence across 12 cities in India.

"We are doing more of the same and continue to focus on the larger cities. Smaller towns are pilots and we are constantly learning from the feedback we get from our customers in these towns," he said.