Avenue Supermarts Ltd.—the operator of retail chain DMart— reported lower than expected profit for the October-December quarter.
Net profit for the company increased 32% sequentially to Rs 552.53 crore in the quarter ended December, according to its stock exchange filing. That compares with a consensus estimate of Rs 603 crore, according to analysts tracked by Bloomberg.
Margins were in-line with projections even as management of the Radhakrishna Damani-founded company said that inflation hurt business during the quarter.
Other Highlights (QoQ)
Revenue rose 18% to Rs 9217.76 crore, against the estimated Rs 9312.83 crore.
Operating profit rose 30% to Rs 866.46 crore, against a forecast of Rs 882.7 crore.
Operating margin came in at 9.4% Vs 8.6%. Analysts had forecast an operating margin of 9.5%
In Q3, the company added 17 stores — its highest in seven quarters. The total number of stores as on Dec. 31 stood at 263.
“Overall gross margins are marginally lower due to mix deterioration,” said Neville Noronha, chief executive officer and managing director of Avenue Supermarts Ltd. “General merchandise and apparel business is consistently seeing relatively lesser sales contribution while essentials and fast-moving consumer goods are doing better,” he said.
Going forward, Noronha expects sales and footfalls to remain dependent on local regulations. “We continue to take all precautions to ensure every shopper, employee and partner is operating in a safe environment,” Noronha said.