DMart Q4 Preview: Store Additions To Aid Revenue, Margins Likely To Contract

Avenue Supermarts Ltd., the operator of DMart retail chain, is expected to report mid-teen revenue growth year-on-year for the fourth quarter on the back of store additions. However, cost pressures may weigh on margins.

• Revenue seen 17% higher at Rs 14,464 crore versus Rs 12,393 crore.

• ⁠Ebitda seen 12% higher at Rs 1,052 crore versus Rs 940 crore.

• Margin seen at 7.27% versus 7.58%.

• ⁠Profit seen 9% higher at Rs 658 crore versus Rs 604 crore.

Nuvama Institutional Equities

• The 3% YoY growth in per store revenue is similar to previous quarters.

• Expect like-for-like of 7.5% in Q4.

• DMart may report a gross margin of 13.5% with a negative bias (Q4FY24: 13.7%) assuming a stable general merchandise and apparel mix. Increasing competition to have negative impact.

BofA

• Key downside: More competitive intensity from other grocery players could materially hurt DMart's growth and stock valuations.

• However, faster than expected store rollout could boost growth rates.

• A positive surprise from DMart Ready or upsides due to the recent business investments could be beneficial.

Systematix Institutional Equities

• Most of the new store openings for DMart occurred late in the quarter, with the full benefits expected to emerge from June 2025 quarter onwards.

• Expect revenue growth of 16.7%.

• Sees Ebitda margin contraction of 54 basis points on year-on-year basis.

Axis Capital

• Revenue to grow largely led by store expansion and 3% year-on-year growth in sales per square feet.

• Ebitda margin to contract 40 bps on the back of higher operational expenses and staff costs.

• Gross margin to remain flattish YoY.

Motilal Oswal

• Consolidated revenue to grow 17% YoY, led by store additions (+14%) and mid-to-high single-digit same store sales growth.

• Expect Ebitda margin to contract 20 bps YoY to 7.2% due to the continued higher cost of retailing.

• Expect PAT to grow 8% YoY.

Shares of Avenue Supermarts Ltd. fell 3.04% to Rs 4,060.5 apiece on the BSE ahead of results compared with benchmark Sensex's 0.32% gain on Friday. The company is set to announce its results on Saturday, May 3, which is a market holiday.