Avenue Supermarts registers strong Q2 performance

Avenue Supermarts advanced 1.23% to close at Rs 1,843.25 on Friday, 11 October 2019.

The company announced today, 12 October 2019, that its net profit rose 47.7% to Rs 333 crore on 22.1% increase in total revenue to Rs 5,949 crore in Q2 September 2019 over Q2 September 2019.

EBITDA rose 32.3% to Rs 515 crore during the period under review. EBITDA margin improved to 8.7% in Q2 September 2019 from 8% in Q2 September 2018. The firm added five stores in Q2 September 2019.

On a consolidated basis, net profit rose 47.49% to Rs 323 crore on 22.44% increase in total revenue to Rs 5,991 crore in Q2 September 2019 over Q2 September 2019.

Consolidated EBITDA rose 33.25% to Rs 517 crore during the period under review. EBITDA margin improved to 8.6% in Q2 September 2019 from 7.9% in Q2 September 2018.

D-Mart follows Everyday low cost - Everyday low price (EDLC-EDLP) strategy which aims at procuring goods at competitive price, using operational and distribution efficiency and thereby delivering value for money to customers by selling at competitive prices.

Commenting on the financial performance of the company Neville Noronha, CEO & managing director, Avenue Supermarts, said, Revenue growth for the quarter was slightly lower than our estimates while gross margin saw improvement over the corresponding period last year due to better revenue mix. PAT margin improvement is in line with revenue growth and also aided by revision in corporate tax rates.

The stock hit a 52-week high of Rs 1,944 on 23 September 2019. The stock hit a 52-week low of Rs 1,126.95 on 23 October 2018.

The stock had outperformed the market over the past one month, jumping 17.46% compared with 2.30% rise in the Sensex. The scrip outperformed the market in past one quarter, soaring 34.30% as against Sensex's 1.79% gain. The scrip had also outperformed the market in past one year, surging 38.71% as against Sensex's 12.13% rise.

Avenue Supermarts owns and operates supermarket chain, D-Mart stores. As of 30 September 2019, the company had 189 stores with retail business area of 6.5 million square feet across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab.

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