Avenue Supermarts: Q1 Net Profit Rises 18% Despite Flat Margin

Avenue Supermarts Ltd. reported a 17.5% increase in net profit in the first quarter of the financial year ending March 2025. The owner of the DMART chain of supermarkets registered a revenue growth of 18.6% during the period at Rs 14,069 crore.

Net profit during the quarter stood at Rs 774 crore, up from Rs 659 crore in the corresponding quarter a year ago, according to a notification sent to the stock exchanges on Saturday.

Revenue remained in line with consensus estimates but net profit failed to beat analyst expectations.

Avenue Supermarts was seen reporting a revenue of Rs 13,957 crore and a net profit of Rs 848.9 crore, according to a consensus of estimates compiled by Bloomberg.

• Revenue up 18.6% at Rs 14,069 crore versus Rs 11,865 crore (Bloomberg estimate Rs 13,957 crore).

• EBITDA up 18% at Rs 1,221 crore versus Rs 1,035 crore (Bloomberg estimate Rs 1,249 crore)

• EBITDA margin remained flat at 8.7% (Bloomberg estimate 8.9%)

• Net profit up 17.5% at Rs 774 crore versus Rs 659 crore (Bloomberg estimate Rs 849 crore)
  
  

Avenue Supermarts' earnings before interest, tax, depreciation and amortisation, or EBITDA, margin was unchanged at 8.7% in the first quarter. The profit margin, too, was unchanged at 5.5%.

Basic Earnings per share in the quarter stood at Rs 11.89 compared to Rs 10.14 a year ago.

The company opened 6 new stores during the quarter with the total store count reaching 371.

"Contribution from General Merchandise and Apparel continued to improve during the quarter and this is reflected in the gross margin uptick. Operating costs have gone up due to continuing effort on improving service levels and building capability for the future," a press release quoted Neville Noronha, chief executive officer and managing director of the company as saying.

Total expenses during the reporting quarter rose 18.6% to Rs 13,056.6 crore. This was led by a 29% increase in employee costs and a 25.8% increase in other expenses. Purchase of stock in trade accounted for a bulk of the expenses, as is normally the case for such a business, at Rs 11,974 crore.

Shares of Avenue Supermarts rose 1% on Friday to close at Rs 4,950 per share on the National Stock Exchange. So far this year, the company's share price has risen 21.8%.