avenue supermarts: Avenue Supermarts Q2 results: Profit drops 38% to Rs 199 crore, margin contracts 240 bps to 6.2%
The company, which runs the DMart chain of stores, had reported a profit of Rs 323 crore in the same quarter of last year.
The consolidated total revenue for the quarter declined 11.43 per cent YoY to Rs 5,306 crore from Rs 5,991 crore in the ear-ago quarter.
Ebitda for the quarter dropped to Rs 330 crore from Rs 517 crore YoY. Ebitda margin contracted 240 basis points to 6.2 per cent from 8.6 per cent in the year-ago quarter.
On a standalone basis, profit was down 36.9 per cent to Rs 211 crore. Analysts at an ET NOW had projected the standalone profit figure at Rs 230 crore.
The standalone total revenues stood at Rs 5,218 crore, down 12.3 per cent YoY.
CEO & MD Neville Noronha said the company’s business has seen some improvement and it continues to gradually progress towards pre-pandemic levels.
“Month-on-month sales have improved during this quarter. August was better than July and September was better than August. The highlight being that footfalls continue to be significantly lower than pre-Covid levels, but basket values are significantly higher than pre-Covid levels. Both these data points are trending towards pre-Covid levels,” Noronha said.
Demand for FMCG and staples remained robust, the company said, noting that the September sales of all stores exceeded September 2019 sales for FMCG and staples.
General merchandise and garments did lesser sales in the same period. However, discretionary consumption has seen significant improvement over the June quarter.
The segment contribution stood at 22.7 per cent in September quarter compared with the usual 27.3 per cent contribution for the year.
“We couldn’t sell this category of products for nearly 2 months of Q1FY21 due to regulatory restrictions and once permitted, we did insignificant sales due to tightening of discretionary spend by consumers. Almost all of the shopping in June quarter was need-based and essential in nature. In light of that, September sales contribution from general merchandise and apparel is encouraging,” Noronha said.
The company said that the progress of the pandemic and its impact on consumer spending during the festival period will determine its financial performance for the next quarter.
“While large suppliers and FMCG business is trending better on sales as well as supplies, supply chains and manufacturing in the non-FMCG SME sector will take some time to get back to pre-Covid levels. Longer lead times, a slower response to immediate demand and the biggest festivals so close on the anvil would be more complicated for the non-FMCG SME sector,” it said.
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