DMart Q1 Update: Revenue rises 18% YoY to Rs 11,584 cr; store count at 327

Avenue Supermarts, which operates retail chain DMart, has reported Rs 11,584 crore standalone revenues for the first quarter ending June.

This is an increase of 18%, compared with Rs 9,806 crore clocked in the same period last year. The company has reported revenues at Rs 10,337 crore for the March quarter.

The company has added 3 stores during the quarter under review, taking the total store count to 327 at the end of June.


For the preceding March quarter, Avenue Supermarts reported a 8% YoY rise in standalone net profit to Rs 505 crore.

Operating profit, calculated as earnings before interest, tax, depreciation and amortization (EBITDA), rose 5% year-on-year to Rs 783 crore during the fourth quarter, but operating margins decreased to 7.6%.

Motilal Oswal expects revenue of DMart to grow at a CAGR of 27% during FY 23-25.

Remarkable consistency in achieving industry-leading growth, margins & ROCE despite having a relatively asset-heavy model warrants rich valuation for DMart, the brokerage said, while giving a target price of Rs 4,200. This is an upside of 18% from the current levels.

"While most retailers found it difficult to expand their footprint in the last three years due to Covid, DMart, despite operating on an ownership model, clocked a strong 20% CAGR in area addition over FY20-23, translating into 19% revenue growth," Motilal Oswal said.

In the last 5 years, the stock has traded at 60 times its EV/EBITDA and a PE of 99x. After a 25% correction since September 2022, DMart is now trading at 36 times its EV/EBITDA and 58x PE on its FY25 earnings, according to the brokerage, which represents a 30% discount to historical multiples.
According to Trendlyne data, Avenue Supermarts has an average target price of Rs 3,974 and the consensus estimate shows growth potential of 3%.

On Monday, DMart shares closed 0.85% lower at Rs 3,856 on NSE. So far this year, the stock is down 5.3%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)