Avenue Supermarts shares down by 1% post Q4FY25 Results

Avenue Supermarts,operator of the retail chain DMart, saw its shares take a morning trade today after the company published its fourth-quarter numbers for the year 2024-25 (Q4FY25) at the weekend. However, the company has managed to recover from the steep fall and is currently trading with a marginal decline of 1%.

 Q4 FY25 Results

Avenue Supermarts reported a 2% year-on-year decline in consolidated net profit for Q4FY25, totaling ₹551 crore, down from ₹563 crore in the same quarter last year. However, on a standalone basis, the net profit saw a modest increase of 2.6% year-on-year, reaching ₹619.71 crore compared to ₹604.20 crore in the prior year. Standalone operating revenue showed better growth, increasing by around 17% year-on-year to ₹14,462.39 crore from ₹12,393.46 crore. Though the year-on-year improvement in standalone numbers, the results of the company were down sequentially from the third quarter (Q3FY25), with net profit decreasing by 21% and revenue falling by 7%.

Margin Contraction Tainted Profitability

Stand-alone EBITDA was at approximately ₹980 crore, a 9% decline from estimates by analysts. The EBITDA margin shrunk sharply, declining by 80 basis points from the previous year and 115 basis points on a sequential basis to a level of 6.8%, significantly falling short of estimates. DMart management attributed the contraction in margins to rising competition in the Fast-Moving Consumer Goods (FMCG) segment, increased wage costs, and higher investments to enhance the level of service. The company did register an acceleration in store additions in the fourth quarter and the entire fiscal year, which was the highest level.

Downward Earnings Revisions

The recent margin decline in DMart’s Q4 results has prompted downward revisions in earnings estimates, with EPS projections cut by 4-8% and EBITDA estimates for FY 26-27 reduced by 5%. Analysts cited rising competition and increasing costs as key concerns but remained broadly confident in the company's long-term value proposition. Target prices have been trimmed slightly, while ratings ranged from 'Hold' to 'Buy', reflecting cautious optimism amid near-term margin pressures.

Market Performance

A glance at the stock's past performance indicates that DMart shares have dipped 12% in the last year. However, the stock is currently trading at ₹4019, with a slight decline of 1%. 

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