D MART
AVENUE SUPERMARTS LIMITED
Q3 FY 21 RESULTS ANALYSIS
Avenue Supermarts Limited is a Mumbai-based company, which owns and operates D-Mart stores. It was founded by Mr. Radhakishan Damani, the 7th Richest Man in India as of 2020.
D-Mart is a national supermarket chain that offers customers a range of home and personal products under one roof.
The Company offers a wide range of products with a focus on Foods, Non-Foods (FMCG) and General Merchandise & Apparel product categories.
The Company offers its products under various categories, such as grocery and staples, dairy and frozen, fruits and vegetables, home and personal care, bed and bath, crockery, footwear, toys and games, kids’ apparel, apparel for men & women and daily essentials.
As of December 31, 2020, the Company had 221 operating stores with Retail Business Area of 8.17 million sq. ft. (adjusted for space leased to AEL during the quarter) across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab.
Consolidated Results :Q3 FY 21 :Q2 FY 21 : Q3 FY 20
1 Income
a1) Revenue from operations 7,542 5,306 6.809 (10.8%YoY);(42.1 QoQ)
a2) Net profit after tax 447 199 384
(16.4% YoY); (125%QoQ)
a3) Diluted EPS in Rs. 6.85 3.04 6.09
Market price :Rs.2958;
52-wk high 3,100.00
52-wk low 1,729.30
PE RATIO :108
b) Other income 45 52 6
Total income 7,587 5.358 6,815
2 Expenses
a) Purchases of stock-in-trade 6,386 4,612 5,541
b) Change in inventories of stock-in-trade (13) (76) 225
c) Employee benefits expense 139 132 118
d) Finance costs 11 9 18
e) Depreciation and amortisation expense 114 101 95
f) Other expenses 341 309 328
Total expenses 6,978 5,087 6,325
3 Profit before tax 609 272 ` 490
4 Tax expenses Current tax 160 73 111
Deferred tax charge! (credit) 3 1 (5)
Net profit after tax 447 199 384
7 Total comprehensive income for the period 446 198 383
8 Profit for the period 447 199 384
9. Total comprehensive income for the period
446 198 383
10 Paid-up equity share capital 647.77 647.77 627.77
(Face Value - Rs.10 - per share)
12 Earnings per share (of ~10!- each) (not annualised):
a) Basic in Rs.6.90 3.07 6.14
b) Diluted in Rs.6.85 304 6.09
The Parent company through Qualified Institutions Placement (QIP) allotted 20,000,000 equity shares to the eligible Qualified Institutional Buyers (QIB) at a issue price of Rs.2,049 per equity share (Including a premium of Rs.2,039 per Equity Share) aggregating to Rs.4,098 crore on 11th February, 2020
•9 stores were added in 9MFY21 and 2 were closed and converted into Fulfillment Center for our E-Commerce Business in 9MFY21
The Statement includes the results of the following entities:Parent Company:
i.Avenue Supermarts Limited
Subsidiaries:
i.Avenue E-Commerce Limited
ii.Align Retail Trade Private Limited
iii.Nahar Seth & Jogani Developers Private Limited
iv.Avenue Food Plaza Private Limited
v.Reflect Wholesale and Retail Private Limited
Consolidated results - some more Analysis
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q3FY21 stood at Rs.689 crore, as compared to Rs. 597 crore in the corresponding quarter of last year.
EBITDA margin stood at 9.1% in Q3FY21 as compared to 8.8% in Q3FY20.
Net Profit stood at Rs. 447 crore for Q3FY21, as compared to Rs. 384 crore in the corresponding quarter of last year.
PAT margin stood at 5.9% in Q3FY21 as compared to 5.6% in Q3FY20
Basic Earnings per share (EPS) for Q3FY21 stood at Rs. 6.90, as compared with Rs. 6.14 for Q3FY20.
Total Revenue for 9MFY21 stood at Rs. 16,731 crore, as compared to Rs. 18,614 crore in the same period last year.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in 9MFY21 stood at Rs. 1,130 crore, as compared to Rs. 1,711 crore during 9MFY20.
EBITDA margin stood at 6.8% in 9MFY21 as compared to 9.2% in 9MFY20.
Net Profit stood at Rs. 686 crore for 9MFY21, as compared to Rs. 1,030 crore in 9MFY20.
PAT margin stood at 4.1% in 9MFY21 as compared to 5.5% in 9MFY20.
Basic Earnings per share (EPS) for 9MFY21 stood at Rs. 10.58 as compared with Rs. 16.49 for 9MFY20.
COMMENTS :
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 performance of the company Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said:
The quarter has seen further improvement in our business and financial metrics. Our overall sales and sales mix is now trending very close to our usual times except for specific customer consumption changes post Covid-19.
Apparel, laundry, footwear, travel and such relevant out of home usage categories are taking more time to recover.
Agile OPEX management along with a good surge in festival shopping allowed us to deliver a significantly better quarter than the previous two quarters. However, December month didn’t trend as well as the festival months of October and November.
Two years and older DMart stores did ~96% of December 2019 sales in the month of December 2020. We have 162 stores that are 2 years or older. Restricted store operations in certain cities post Diwali due to night curfews and weekend closure led to significantly larger declines in those stores versus same period last year.
There continues to be a distinct behaviour of doing shopping more efficiently by shoppers. Lesser trips and higher basket values continue to be the norm.
While there is a general reduction in basket values compared to peak pandemic levels, they still continue to be relatively higher than pre Covid-19 levels.
We also continue to face inconsistent supplies from the non FMCG sector. Raw material prices are also going up. Availability in certain categories is likely to get worse before getting better. This could therefore have an impact on sales mix and margins in the near term.
DMart Ready : This quarter we soft launched DMart Ready in select pin codes of Ahmedabad, Bangalore and Hyderabad.
In addition, at some of our brick and mortar stores we have leased some part of the space to Avenue E-Commerce Limited (AEL) to commence E-Commerce operations in those cities.
Post Covid-19 environment is creating opportunities to launch DMart Ready in more cities.
However, we will continue with our approach of small trials, reviews and controlled acceleration for DMart Ready.
Conclusion
All our stringent safety precautions at stores shall continue as before to ensure our employees and customers have a safe place to work and shop. We also intend to continue extended store operating hours. This is allowing us to serve our customers in a more safe and efficient way.
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