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Systematix Research Report
Avenue Supermarts Ltd. reported below than expected performance with ~14.2% YoY revenue growth (already reported), margins at 7.9% (versus our expectation of 8.3%) leading to a 7.9% PAT growth in Q2 FY25. Sales per store and per square feet saw improvement YoY but at a lower rate.
Revenue per store was up 1.7% to Rs 373 million in Q2 FY25 while Ebitda per store declined 1.7% YoY to Rs 29 million. Revenue per sq.ft grew 0.4% YoY to Rs 8,893 (Rs 35,570 annualized) while Ebitda per sq.ft declined ~3% YoY to Rs 699 (Rs 2,798 annualized).
Company stated that the revenue growth was impacted due to rise in ecommerce (quick commerce) players in metro cities which generate high sales per sq ft. Company’s online format D-Mart Ready too witnessed healthy growth of 21.8% YoY in H1 FY25.
Gross margin expanded 21 bps YoY to 14% as contribution from margin accretive general merchandise and apparel mix continued to see an uptick, which has been the trend since Q3 FY24. Ebitda margin declined 27bps YoY to 7.9%.
Other expenses and employee costs increased 31bps and 18bps respectively. D-Mart opened six new stores during Q2 FY25 (12 stores in H1 FY25, 41 stores in FY24), taking its total store count to 377, covering an area of 15.8mn sq ft. The store size of incremental stores added in Q2 stood at 66.67k sq ft whereas the average store size now stands at 41.9k sq ft.
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