DMart shares decline 3% post Q4 Results; More than 6000 crore wealth erosion for Radhakishan Damani & other promoters

Stock Market Today: DMart share price declined 3% in the morning trades on Monday post Q4 Results that were declared by Avenue Supermarts over the weekend

Avenue Supermarts Q4 Results

The retail chain DMart, operated by Avenue Supermarts and backed by ace investor Radhakishan Damani, on Saturday, March 3, announced its January-March quarter results for fiscal 2024-25 (Q4FY25). Avenue Supermarts reported a 2% decline in consolidated net profit at ₹551 crore, down from ₹563 crore crore during the same period last year.

At the standalone level however the reported net profit at ₹619.71 increased 2.6% compared to ₹604.20 crore

The standalone revenues from operations at ₹14,462.39 however grew around 17% compared to ₹12,393.46 crore in the year ago quarter.

It is the pressure on margins that led to the impact on the net profit.

Standalone Earnings before Interest Tax depreciation and amortisation at around ₹980 Crore came 9% lower compared to estimates said Motilal Oswal Financial Services . Ebitda was up by a modest 4% YoY, as margins contracted 80 bps year on year ( down 115bp sequential) to 6.8% (~70bps miss) due to weaker Gross margin and ~12% YoY increase in per sq. ft operating costs .

Analysts Views- Higher competition a concern

DMart's margin contracted to a low of 6.8%, which came as a big negative surprise, as per analysts at Jefferies India Pvt ltd. They said that the management has attributed this to high competition in FMCG along with increase in wages and higher investments on service levels. The store additions accelerated in 4Q as well as FY to the highest level. The CEO Designate will take another 4-5 months to formally take over while current CEO plans to dedicate more time on store openings, e-comm scale-up etc. Jefferies has trimmed Earnings per share estimates by 4-7% and given Hold ratings for the stock.

Motilal Oswal Financial Services has cut FY26-27estiamted Ebitda by 5% each due to heightened competitive intensity and rising Cost of Revenue, while their FY26-27 estimated Earnings per share is cut by ~6-8%. They reiterate BUY rating but with a revised Target price of ₹4,350 compared to ₹4,650 earlier.

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