🏬🛍️ How Big is DMart: A comprehensive study!
There's one thing that most Indians love: a discount on the MRP. And getting a buy one, get one free offer just makes our day! It's no surprise that DMart, a one-stop shop for basic household and personal items, attracts a large number of customers.
🌟 About DMart 🌟
👉 Avenue Supermarts (ASL) is a supermarket chain that operates under the D-Mart brand and focuses on value retailing.
👉 It was founded by Radhakishan Damani, a great entrepreneur and investor who is also known as Rakesh Jhunjhunwala's guru (Big Bull of India).
👉 DMart is often termed the Walmart of India. D-Mart has maintained consistent profitability and is an outperformer in its peer group, thanks to its proven business model.
🧐 DMart's differentiating factor 🧐
📍 DMart takes a different approach than Big Bazaar or Reliance Retail. Its concept is straightforward. For example, when we go to DMart, we find simple interiors and can quickly get to the products that we want to buy.
📍 DMart primarily sells products that people require often. Groceries and fast-moving consumer goods are two examples. Anything that isn’t selling is quickly replaced with something that does.
🤔🤔Why Does DMart Provide Discounts?
We're all aware that DMart offers fantastic deals, but why? The answer to this question lies in its mission statement: "With our mission to be the lowest priced retailer in the regions we operate, our business continues to grow with new locations planned in more cities."
😲😲 How Does DMart Do It?
🔆 Volume Discounts 🔆
DMart is quick! Due to the high sales volume, it is necessary to purchase inventory in large quantities and on a regular basis. Manufacturers are drawn to this cycle, and they offer volume discounts. They pass on the discount to their customers.
🔆 Creditor Days 🔆
DMart pays its suppliers within a mere ten days, as compared to the usual 60 days by its counterparts. This gives it more negotiating power.
🔆 Minimalist Approach 🔆
Typically a DMart store does not have blaze lighting, music, or elaborate interiors that many other retailers provide. They are committed to offering products at the lowest possible cost. These factors enable it to reduce costs and pass the savings on to its customers.
🔆 Rent 🔆
Rent is one of the most expensive expenses for many retailers. As a result, most of DMart's stores are built on their own land, because of which rent and lease costs are immediately reduced.
🔆 Business To Consumer Model 🔆
DMart prefers to obtain products at the lowest possible cost.
As a result, no middlemen are involved. This allows it to save a lot of money on commissions and lowers the markup.
🔆 Not So Expensive Advertising 🔆
DMart doesn't spend a lot on advertising. It mainly uses visual and print mediums to promote its brand name and products.
✅ CSR Initiatives ✅
DMart is proud of its CSR initiatives. DMart has aided its employees and other communities through its socially responsible business practices. Its "Better School, Bright Futures!" campaign assists students in and around Mumbai in understanding things better.
It has created an ecosystem where they can benefit from improved education, mentoring, research facilities, and new networking opportunities.
🌱 Fundamentals of DMart 🌱
◾DMart's PE ratio is lower than the average industry PE.
◾It has a market capitalization of ₹ 2,58,031 crores.
◾It has a good current ratio of 3.67 and an ideal debt to equity ratio of 0.0.
◾The promoters own 74.99% of the company and there are no pledged shares.
◾It has a high price-to-book value ratio. As a result, its stock is trading at a premium to its book value.
◾Its revenue and net income are showing an increasing trend for the past five years.
🌱 Growth Drivers for the stock's future growth 🌱
◾The store addition trajectory will accelerate and include 80 incremental store additions (4.8 million square feet) in FY23-24E.
◾Strong liquidity position and healthy operating cashflows to spur storage growth (cash and investments: | 1500+ crore)
◾In Q4 results, Company has shown resilient margins despite low contribution from non-food due to Omicron
😃 Please share your views/queries in the comment section. 😃
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