Avenue Supermarts Ltd.—the operator of retail chain DMart, reported lower-than-expected profit for the January-March quarter.
Net profit increased 3% year-on-year to Rs 426.83 crore in the quarter ended December, according to its stock exchange filing. That compares with a consensus estimate of Rs 510.41 crore, according to analysts tracked by Bloomberg.
Sequentially, net profit fell 23% from Rs 552.56 crore, it said. Margins, too, missed estimates.
“January 2022 started extremely well but then the Omicron wave of Covid‐19 reduced the momentum over the middle of the month,” said Neville Noronha, chief executive officer of Avenue Supermarts. “These waves typically hurt the high margin and discretionary items more.”
Recovery from these waves typically takes 40-50 days, said Noronha, adding that by March, demand conditions had recovered. The company added that the high inflation environment is helping it manage costs better.
Other Highlights (YoY)
Revenue rose 19% to Rs 8,786.45 crore, against the estimated Rs 8721.3 crore.
Operating profit rose 21% to Rs 739.3 crore, against an estimate of Rs 807.3 crore.
Operating margin came in at 8.4% Vs 8.3%. Analysts had forecast it at 9.3%
In Q4, the company added 21 stores, taking its total outlet count to 284 as on March 31.
Noronha said that the e-commerce business—DMart Ready—has slowed seen its growth trajectory slow after the Omicron wave. The company has now commenced operations in seven new cities during the year – Bhopal, Indore, Kolhapur, Nagpur, Vadodara, Surat and Vizag during the year ended March 2022.
Shares of Avenue Supermarts closed 0.93% lower before the results were announced as against 0.16% fall in the benchmark Nifty 50 index. The earnings were announced on Saturday, a market holiday.