Higher discretionary sales, store growth key for gains in Avenue Supermarts

Consolidated net profit rose 17.5% Y-o-Y in Q1FY25 helped by general merchandise and apparel sales

Shares of Avenue Supermarts (DMart) have gained about 5 per cent over the past week on better-than-expected June quarter (Q1FY25) performance, hopes of a recovery in discretionary demand, and margin gains going ahead.

The key takeaway from the results was the robust gross margin performance. Riding on improving mix, DMart posted a 34 basis points year-on-year (Y-o-Y) improvement in gross margins to 14.9 per cent. The company indicated that higher contributions from the more profitable general merchandise and apparel category led to the gross margin expansion.

Though there was an improvement, the gross margins are still lower