DMart Q2 Results: Avenue Supermarts Ltd Reports Steady Growth Amid Challenges

Avenue Supermarts Ltd, the parent company of the popular retail chain DMart, has announced its financial results for the second quarter of the fiscal year 2024-25. The company has reported a steady increase in revenue and net profit, despite facing challenges from the quick commerce sector and slower consumer demand in some product categories.

The key highlights of DMart's Q2 FY2025 results include a 14.41% year-on-year increase in revenue from operations, reaching 14,444.50 crore during the quarter under review. This is a significant rise from 12,624.37 crore in the corresponding quarter of the last fiscal year.

DMart's consolidated net profit for the second quarter ended September 2024 has risen by 5.8% to 659.4 crore, as compared to 623.35 crore in the same period last year. This growth reflects the company's ability to maintain profitability despite the competitive retail landscape.

The company's total expenses in the September quarter increased by 14.94% to 13,574.83 crore, while its total income surged by 14.34% to 14,478.02 crore. This indicates that DMart is effectively managing its costs and optimizing its revenue streams.

Avenue Supermarts Ltd has also expanded its store network, adding six new stores during the quarter, bringing the total number of stores to 377 across India as of September 30, 2024. This strategic expansion aims to enhance the company's market presence and customer reach.

The company's focus on operational efficiency and disciplined cost management has allowed it to maintain healthy EBITDA margins. The EBITDA margin stood at 7.9% in Q2 FY2025, compared to 8.1% in Q2 FY2024.

DMart's Q2 FY2025 results also highlight the company's commitment to digital transformation. The DMart Ready service, which offers online grocery formats, has seen significant growth, with a 21.8% increase in H1 FY2025. This indicates that DMart is actively adapting to changing consumer preferences and leveraging technology to enhance its offerings.

Despite the positive trends, experts are cautious about DMart's future prospects. The quick commerce sector remains a significant threat in major urban areas, and DMart may face challenges in maintaining its revenue growth. Additionally, the company's ability to meet its store opening targets remains a concern.

The company's like-for-like revenue growth for two years and older stores dipped to 5.5% in Q2 FY2025 from 8.6% in Q2 FY2024, reflecting slower growth in mature stores. This indicates that DMart is experiencing some pressure on revenue growth in its established markets.

Overall, DMart's Q2 FY2025 results demonstrate the company's resilience and adaptability in the face of competitive pressures. While there are challenges ahead, Avenue Supermarts Ltd remains committed to its strategic goals and continues to expand its market presence through efficient operations and strategic investments.

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