DMart Q4 Results Review - Soft Demand, But Earnings Likely To Bottom Out: Motilal Oswal

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Avenue Supermarts Ltd.’s consolidated profit after tax grew 8% YoY (25% miss), despite a 21% YoY increase in revenue, driven by the expansion in the company’s footprint. This was due to weak demand in the margin accretive discretionary category, resulting in a 100 basis point drop in gross margin. Additionally, store productivity remained flat with no increase in revenue/square feet, likely due to larger store sizes. Over the last three years, DMart has been adding larger stores to their retail chain. With these larger stores, the company expects to see an increase in store productivity. The previously smaller stores are expected to experience a growth plateau after ~ three years. This, along with gradual recovery in discretionary demand, general inflation cool off, softening raw material pricing and healthy cost efficiency may see improvement in earnings growth. While the robust store adds, coupled with strong cost efficiencies, could play a key role in growth, the near-term challenges within the discretionary segment and rich valuations could be the key monitorables for the company. We have factored revenue/profit after tax compound annual growth rate of 26%/29% over FY23-25E, (realigning profit after tax downwards by 12%/3% for FY24/25E)..Click on the attachment to read the full report:.DMart Q4 Results: Profit Up 8%, Higher Costs Dent Margin.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

DMart Q4 Results Review - Soft Demand, But Earnings Likely To Bottom Out: Motilal Oswal

Consolidated Ebitda/PAT up 4%/8% YoY (big miss), dragged by weak gross margin.

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DMart Q4 Results Review - Soft Demand, But Earnings Likely To Bottom Out: Motilal Oswal

Consolidated Ebitda/PAT up 4%/8% YoY (big miss), dragged by weak gross margin.

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