The shares of Avenue Supermarts, company that owns and operates the popular retail chain DMart on Friday (October 4) saw a sharp 4.8 per cent decline during the intraday trading session, hitting a three-month low of Rs 4,703 apiece.
The market reaction followed the company’s second-quarter financial update for FY25, which fell short of expectations.
DMart’s parent company, founded by billionaire Radhakrishna Damani, has enjoyed consistent revenue growth in recent years. However, there are growing concerns that this pace may be slowing, especially as the company added fewer stores and struggled to boost store productivity.
The shares of the company today opened at Rs 4,875.00 apiece and fell to a low of Rs 4,703.00 apiece during the intraday trading session on the NSE.
At 1:14 pm IST, the company's stock were trading at Rs 4,770.00 apiece, down by 3.49 per cent.
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One of the key metrics driving these concerns is the company’s annualised revenue per store, which increased by just 1 per cent year-on-year, standing at Rs 150 crore.
On October 3, the company through an exchange filing announced its quarterly update of the Company at the end of Q2 of Financial Year 2024-25 (July 2024 – September 2024).
"Standalone Revenue from operations for the quarter ended (QE) September 30, 2024 stood at Rs 14,050.32 crores," the company said in the BSE filing.
Furthermore, it added the standalone Revenue from operations for QE September 30, 2024 and the corresponding quarter for the past three years which are as follows:
"The total number of stores as of September 30, 2024 stood at 377," added the company.
In terms of profitability, Avenue Supermarts reported a net profit of Rs 774 crore for the quarter, a 17.4 per cent increase from Rs 659 crore reported in Q2 FY24. Again, while the profit rise appears solid, the numbers weren't enough to offset broader concerns about the company’s slowing revenue momentum and store productivity.
