DMart Q4 results: Profit soars 53% to Rs 414 crore; over 80% stores hit by Covid 2.0

NEW DELHI: Avenue Supermarts (DMart) on Saturday reported a 52.76 per cent year-on-year jump in consolidated net profit at Rs 414 crore for March quarter.

The chain of hypermarkets had reported a net profit of Rs 271 crore in the corresponding quarter of last year.

Consolidated total revenue for the quarter rose to Rs 7,412 crore compared with Rs 6,256 crore in the year-ago quarter.

Earnings before interest, tax, depreciation and amortization (Ebitda) for the quarter came in at Rs 613 crore against Rs 417 crore in the same quarter last year. EBITDA margin expanded 160 basis points to 8.3 per cent March quarter compared with 6.7 per cent in the year-ago quarter.

PAT margin stood at 5.5 per cent against 4.3 per cent YoY. The company added 13 stores during the quarter. For FY21, 22 stores were added and 2 stores were converted into fulfilment centers for Avenue E-commerce Limited.

The company said significant disruptions have been seen from March onwards for its store operations. The restrictions and local level enforcements have become much stricter.

"Restrictions vary from store closures on certain days or for extended periods, to restricted store operating hours and selling only essential goods in most cities and towns. In general, more than 80 per cent of our stores are operating for significantly lower number of hours (not exceeding four hours per day) or are even shut for operations for one to weeks or shut on weekends. These shut downs are having an adverse and severe impact on our revenues," it said.

DMart added the it has continued to receive regular supply of goods from its suppliers.

"However, this time we may have a problem of excess inventory. An issue larger than the first wave. The receding threat of the pandemic and consequent sales surge in Q3 and most of Q4, followed by the oncoming summer and back to school season made us plan more optimistically. This could have a longer-term impact on our inventory to sales ratio as we could take comparatively longer time to liquidate the excess inventory," it said.

"FY 2021 has been a challenging year for our business. The year began amidst a strict lockdown post the emergence of the Coronavirus (Covid-19) towards the end of the last financial year. The economy gradually opened post May 2020 and the second half of the year was progressing towards recovery. However, a much stronger second wave of Covid-19 infections hit the country towards the end of FY 2021 and has once again resulted in significant disruption to our business as several cities and towns have announced restrictions," Neville Noronha, CEO & Managing Director, Avenue Supermarts said.