Avenue Supermarts Q2FY23 PAT up 64.14% at Rs686cr on better cost controls and inventory efficiencies

Avenue Supermarts reported 36.58% growth in total sales revenues for the September 2022 quarter on consolidated basis at Rs10,638cr. Sequential revenues were up 5.98%.

For the first half of FY23, the company reported 59.2% growth in revenues at Rs20,192 crore. EBITDA was up 33.5% in the quarter at Rs895 crore.  

The company, which runs the D-Mart chain, has persisted with its Everyday Low Cost – Everyday Low Price (EDLC-EDLP) strategy, which entails squeezing suppliers for deep discounts and then passing on big discounts to the end customers in residential localities.

FMCG and staples have done a lot better than general merchandise and apparel with inflation hitting the low price point products most.

Consolidated Profit after tax (PAT) for September 2022 quarter was up 64.2% at Rs686cr.

Apart from the cost controls and investor efficiency in the quarter, the company also gained from a Rs141 crore tax credit in the quarter, which helped the net profit surge despite operating profits growing at the same rate as sales growth.

While D-Mart is now present in 18 cities, 90% revenues come from the metros. Net margins are flat on a yoy basis.