Avenue Supermarts Q2 Results FY2023, Revenue at Rs. 10638 crores

On 15th October 2022, Avenue Supermarts announced its quarterly results for the second quarter of FY2023.

Q2FY23 Performance updates:

- Total Revenue for Q2FY23 stood at Rs. 10,638 crores, as compared to Rs. 7,789 crores in the same period last year. Total Revenue for H1FY23 stood at Rs. 20,676 crores, as compared to Rs. 12,972 crores in the same period the previous year
- EBITDA in Q2FY23 stood at Rs.892 crore, compared to Rs. 669 crores in the corresponding quarter of last year. EBITDA margin stood at 8.4 % in Q2FY23 as compared to 8.6% in Q2FY22. EBITDA in H1FY23 stood at Rs. 1,900 crores, compared to Rs. 893 crores during H1FY22. EBITDA margin stood at 9.2% in H1FY23 as compared to 6.9% in H1FY22.
- Net Profit stood at Rs.686 crore for Q2FY23, compared to Rs. 418 crores in the corresponding quarter of last year. PAT margin stood at 6.4% in Q2FY23 as compared to 5.3% in Q2FY22. Net Profit stood at Rs. 1,329 crores for H1FY23, as compared to Rs. 513 crores in H1FY22. PAT margin stood at 6.4% in H1FY23 as compared to 3.9% in H1FY22. 

Commenting on the performance of the DMart (Brick and Mortar) Business Model, Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said: “Q2 FY 2023 saw revenue growth of 35.8% over the corresponding quarter last year. The FMCG and staples segment of the business has performed better than the general merchandise and apparel segments. Discretionary items in the non-FMCG segment while recovering have still not come back to pre-pandemic levels. The inflationary stress is more acute at lower price points in discretionary non-FMCG categories. Average basket values continue to be elevated and footfalls continue to be lower than pre-pandemic levels. Post wave 2 of Covid-19, January 2022 was the first-month post pandemic when basket values dropped and footfalls were near pre-Covid-19 levels. However, post the omicron third wave basket values again increased and footfalls reduced commensurate to that basket value. It has remained like that till the month of September 2022. Reduction of footfalls coupled with increased basket values make FMCG shopping more productive and profitable; however, it has a direct negative impact on the more profitable non-FMCG categories. As and when footfalls increase, we assume we should be inching toward our pre-pandemic contributions for apparel and general merchandise sales.

Our like-for-like growth (LFL) for all stores that are 5 years or older as of the end of September 2022 was at 6.5% annualized / 20.8% absolute (Q2FY23 versus Q2FY20). Within this cohort, we are seeing lesser like-for-like growth in older stores which have significantly higher turnover per square feet than the company average and we have opened a new DMart store close to it. However, we do not see that effect in our younger stores. They are doing well.

LFL growth and average sales per store at an enterprise level depend primarily on the number of new stores added per year and the population profile of the city for those newly opened stores. Over time as the DMart brand has become more popular, store revenues have started accelerating at a faster pace than earlier. Within that, large metros bring in revenues much faster and much higher absolute levels than smaller cities. Yet, the newer stores have revenues per store significantly lower than the older stores.”

Commenting on the performance of the DMart Ready Business Model, Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said: “We continued our strategy of targeting large towns/cities for this business and commenced operations in 6 more cities (Anand, Belgaum, Bhilai, Jaipur, Raipur, and Vijayawada) during the quarter. We are now present in 18 cities across India. While the expansion in 18 cities looks like a big leap, in most of the newer cities these are just experiments with capital allocations commensurate with outcomes. More than 90% of our revenues still continue to come from Mumbai (MMR), Pune, Bangalore, Hyderabad, and Ahmedabad. These large towns are holding on to their Covid-19 time revenues.” 
 

The Avenue Supermarts share price fell by 3.54%