DMart Q2 Update: Revenue rises 18% YoY to Rs 12,308 crore, store count at 336

Avenue Supermarts, which operates retail chain DMart, reported an 18% increase in its standalone standalone revenues at Rs 12,308 crore for the second quarter ended September.

The company's revenue stood at Rs 10,384 crore in the same period last year. On a sequential basis, revenues rose 6% from Rs 11,584 crore clocked in the preceding June quarter.

The company added nine stores during the quarter under review, taking the total to 336 at the end of September 2023.

In the June quarter, DMart reported a mere 2% year-on-year (YoY) rise in net profit at Rs 695.36 crore. Profitability was impacted due to inflationary stress on discretionary product demand.

In the same period, revenue grew 18% YoY, aided by store additions.

The company's management had earlier said that the mix was improving and trending towards the pre-pandemic level, but the first quarter’s performance didn't show any signs in that direction, which remained a concern for analysts.

Post the first quarter results, Nuvama adjusted down the company's FY24E PAT by 3%, factoring in the lower gross margin and miss. It valued DMart at 70x PE (marginally lower than its pre-Covid one-year forward PE average of 74x), and rolled over to Q1FY26E, which resulted in a target price of Rs 4,015.

Geojit Financial Services expects DMart's Revenue and PAT to grow at a 21% and 19% CAGR over FY23-25E.

Product mix and margins are expected to improve going forward given moderating inflationary pressure, which, along with the strong store additions, will aid in improving earnings growth, the brokerage said, while giving a target price of Rs 4,150.

According to Trendlyne, Avenue Supermarts has an average target price of Rs 4065.75 and the consensus estimate represents an upside of 9% from current levels.

On Tuesday, DMart shares closed 1.59% higher at Rs 3,734 on the NSE. So far this year, the stock is down 8.3%.

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