DMart Q2 Results: Net Profit Up 5.8%, Misses Estimates

Avenue Supermart Ltd. reported a 5.8% year-on-year uptick in net profit for the second quarter of this financial year, missing analyst estimates.

The DMart parent recorded a net profit of Rs 659.44 crore for the quarter ended September, compared to Rs 623.35 crore in the same quarter of the previous fiscal year, according to its stock exchange notification. This was below the Rs 812 crore estimate by analysts tracked by Bloomberg.

Revenue increased by 14.4% year-on-year for the three months ended September, reaching Rs 14,444.50 crore. Analysts had projected revenue of Rs 14,597 crore.

Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 8.8% year-on-year to Rs 1,093.77 crore. The Ebitda margin contracted to 7.6% from 8% in the same period the previous year. Analyst estimates for Ebitda and Ebitda margin tracked by Bloomberg were Rs 1,210 crore and 8.30%, respectively.

Ahead of the earnings, five brokerages—Morgan Stanley, Bernstein, Goldman Sachs, JPMorgan and Macquarie—cited increased competition from quick commerce players like Blinkit as a key reason for Avenue Supermarts' slow growth.

Additionally, slower store additions and weaker growth projections point to a more challenging operating environment.

“Overall H1 FY2025 like-for-like revenue growth was 7.4% for 2 years and older stores. The Q2 FY 2025 like-for-like revenue growth for the same cohort of stores was at 5.5%," said Neville Noronha, CEO and Managing Director.

"We clearly see impact of online grocery formats including DMart Ready in large metro DMart stores which operate at a very high turnover per square feet of revenue. DMart Ready business grew by 21.8% in H1 FY2025,” he added.

Shares of the company closed 0.76% lower at Rs 4572.7 per share, compared to a 0.14% decline in the NSE Nifty 50. The stock has risen 18.38% year-to-date and 12% over the past 12 months.

Fourteen out of the 27 analysts tracking Avenue Supermarts have a 'buy' rating on the stock, five recommend a 'hold' and eight suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 9.5%.