Avenue Supermarts Q3 net jumps 65.8% at Rs 2.5 bn on improved gross margins

Avenue Supermarts was listed on stock exchanges with a blockbuster listing in March last year, making Radhakishan Damani, a part of India's richest 20 club

Avenue Supermarts, which runs the D-Mart supermarkets chain, on Thursday posted a 65.77 per cent jump in its net profit on account of overall increase in margin mix and improved operating costs.

Its net profit stood at Rs 2.51 billion on a standalone basis for the quarter ended December 31, compared to Rs 1.51 billion in the corresponding quarter a year ago.

Its total income in the quarter under review stood at Rs 41.10847 billion, up 22.71 per cent, against Rs 33.4785 billion in the year-ago period, Avenue Supermarts said.

"The company has seen a 65.8 per cent jump in net profits due to gross margin increase and improved operating costs," Neville Noronha, CEO and managing director, Avenue Supermarts told PTI here.

"Growth in this quarter appears to be lower as compared to previous year quarter because of demonetisation base effect. Growth in December 2016 quarter was significantly higher than the growth of FY 16-17," the company had said in its BSE filing.

Total revenue for nine months ended December stood at Rs 112.01 billion, as compared to Rs 87.7 billion in the same period last year. Its net profit between April and December grew by 60 per cent to Rs 6.18 billion, as compared to Rs 3.86 billion for the same period last year.

Avenue Supermarts was listed on stock exchanges with a blockbuster listing in March last year, making Radhakishan Damani, the founder of the company and a low-profile investor, a part of India's richest 20 club.

The board approved the acquisition of 50.79 per cent paid-up share capital of Avenue E-Commerce, an associate company of Avenue Supermarts Limited.

Post acquisition, Avenue E-Commerce shall become a wholly-owned subsidiary of Avenue Supermarts, the company said. When asked about the e-commerce business, Noronha said that it is still in its pilot stage in Mumbai.

The company added five new stores in the quarter, and 10 stores in the nine months from April to December. "More stores are in the pipeline, and typically the last quarter of the year has maximum store openings. We are concentrating on the southern and western markets," Noronha added.

At present, the company operates 141 stores in Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Punjab and Chhattisgarh.

The company scrip ended at Rs 1156.95, up 1.19 per cent on the BSE.