Avenue Supermarts Q2 Profit Dips 38% To Rs 199 Crore

On Saturday, Avenue Supermarts, that runs the DMart chain of supermarkets, reported a 38.39 percent fall in the consolidated net profit at Rs 199 crore for the September-ended quarter from Rs 323 crore in the same period a year ago.

Its consolidated total revenue for the quarter declined 11.43 percent to Rs 5,306 crore from Rs 5,991 crore in September 2019.

EBITDA (earnings before interest, taxes, depreciation, and amortization) fell to Rs 330 crore from Rs 517 crore in the September quarter last year. EBITDA margin contracted 240 basis points to 6.2 percent from 8.6 percent a year ago.

Commenting on the Q2 results, CEO and MD Neville Noronha said that business has been gradually moving towards pre-COVID levels.

"Month-on-month sales have improved during this quarter. August was better than July and September was better than August. The highlight being that footfalls continue to be significantly lower than pre-Covid levels, but basket values are significantly higher than pre-Covid levels. Both these data points are trending towards pre-Covid levels," Noronha said.

The company noted that the September sales of all stores exceeded September 2019 sales for FMCG and staples category.

"While large suppliers and FMCG business is trending better on sales as well as supplies, supply chains and manufacturing in the non-FMCG SME sector will take some time to get back to pre-Covid levels. Longer lead times, a slower response to immediate demand and the biggest festivals so close on the anvil would be more complicated for the non-FMCG SME sector," it said.

Shares of Avenue Supermarts closed 0.52 percent higher at Rs 1,988 on Friday, ahead of the Q2 results.