DMart's recovery stretches on

Avenue Supermarts Ltd's recovery has been painfully slow, testing the patience of its investors. The food & grocery retailer, running DMart supermarket chain, has been reporting lacklustre results for many quarters now.

- Pallavi Pengonda

Unfortunately, the three months ended Dec-ember (Q3FY24) results had no big positive surprises. Standalone Ebitda margin shrank yearon-year for the sixth consecutive time, falling 16 basis points (bps) to 8.5%.

A combination of lower gross margin, and higher employee costs and other expenses impacted the Ebitda margin in Q3. Plus, revenue growth at 17.2% was underwhelming as store additions were subdued and sales per store performance dull.

"On productivity, revenue per square foot increased 4% year-on-year to ₹37,728 on an annualized basis but is still 6% lower than the pre-covid number of ₹40,101 DMart achieved in Q3FY20," said Nuvama Institutional Equities analysts.

DMart added five new stores last quarter taking the total count to 341 with a retail business area of 14.19 million square feet. For the nine months ended December, 17 stores were added vis-à-vis 22 in the same period last year. In view of slower store additions, some analysts have cut their store addition assumptions for FY24.