DMart Earnings Preview | Net profit to increase 45% as margins set to expand

All eyes are on Avenue Supermarts as the company that owns and operates DMart rolls out September quarter results on October 15, becoming the first retail chain firm to report numbers for the earnings season as has been the tradition.

The company has already announced its standalone revenue from operations. On October 3, it said in an exchange filing that it has reported a 35.75 percent rise in revenue to Rs 10,384.66 crore from a year ago. It added eight stores in the quarter, taking the total to 302 at the end of September.

According to an average of estimates of five brokerages polled by Moneycontrol, standalone profit after tax is expected to come in at Rs 655 crore, a year-on-year jump of 45 percent. Sequentially, standalone PAT might decline 3.5 percent due to seasonal weakness.

Core profit margin is set to expand 120 basis points bps to 10 percent from a year ago on the back of operating leverage and improving share of general merchandise sales, according to analysts.

Kotak Institutional Equities expects core profit margin at 9.3 percent, lower by 100 bps on a sequential basis due to seasonal weakness and lower gross margins.

According to Prabhudas Lilladher, D-Mart has a huge runaway for growth with potential to open 1,500 stores: “General merchandise and apparel category share has risen from 22.4 percent to pre-COVID levels of 28 percent, which is a big positive. D-Mart Ready is also scaling up fast, expect breakeven at the core earnings level by FY25.”

Promoted by Radhakishan Damani and his family, DMart retails basic home and personal products across various states including Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, and Tamil Nadu.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.???