RK Damani-led Avenue Supermarts Ltd (DMart) posted its Q1 FY23 results on July 9, 2022. The company reported a whopping 490% YoY (Year on Year) jump in its standalone net profit which came in at Rs 680 crore for the quarter under review from Rs 115 crore last year. On a standalone basis, the PAT was up 45.7% QoQ (Quarter on Quarter) to Rs 679 crore from Rs 466 crore in the previous quarter.
The 6-fold increase in the company’s net profit on a YoY basis is mostly due to the slowdown in sales and revenue due to Q1 in FY22 being marred by the second wave of the coronavirus pandemic. The second wave-induced lockdowns reduced the number of people stepping out of their homes, which resulted in fewer sales. That being said, Q1 FY23 was the first full quarter of zero disruption from the Covid-19 pandemic. Moreover, the company said that Q1 and Q3 are the two quarters that are revenue and profit-enhancing quarters due to the back-to-school/college season and the onset of monsoons.
DMart’s revenue from operations was up by nearly 95% YoY to Rs 9,806 crore from Rs 5,031 crore in the year ago period. The revenue from operations was up almost 14% QoQ to Rs 9.806 crore from Rs 8,606 crore in Q4 FY22. However, the company’s income from other sources remained flat on both sequential and YoY basis.
The company added 10 stores in Q1 FY23; the total number of stores opened in the last 3 financial years reached the 110 mark.
DMart’s scrip closed in the green at Rs 3,941.70 per share, up 2.36% after the end of the intraday trading session on July 8, 2022, ahead of the company’s first-quarter results for Financial Year 2022-23.
Commenting on the performance of the company Neville Noronha, CEO & Managing Director, Avenue Supermarts, said, “We ended Q1 FY 2023 with growth across all key financial parameters. There has been a very good recovery in 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. We cumulatively opened 110 stores over the last 3 financial years which never got an opportunity to operate in normal circumstances over the last 2 years. 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”
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Research Analyst: Bavadharini KS