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DMart Q4 net profit rises 53%; co says over 80% stores hit by Covid restrictions – Mint

Avenue Supermarts’ consolidated net profit for the quarter ended March came at 414 crore, up 52.7% as compared to 271 crore in the year ago quarter. The revenue from operations witnessed a growth of 18.4% to 7,411.6 crore against 6,256 crore year-on-year (YoY).

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q4FY21 stood at 613 crore, an increase of 47% from 417 crore in the corresponding quarter of last year. EBITDA margin came at 8.3% for the quarter as compared to 6.7% in Q4FY20.

The company said that significant disruptions have been seen from March 2021 onwards for its store operations. More than 80% of its stores are operating for significantly lower number of hours (not exceeding four hours per day) or are even shut for operations for one to weeks or shut on weekends. ”These shut downs are having an adverse and severe impact on our revenues”.

Restrictions vary from store closures on certain days or for extended periods, to restricted store operating hours and selling only essential goods in most cities and towns, the retail chain said in the exchange filing.

DMart added that it has continued to receive regular supply of goods from its suppliers. ”However, this time we may have a problem of excess inventory. An issue larger than the first wave.”

”The receding threat of the pandemic and consequent sales surge in Q3 and most of Q4, followed by the oncoming summer and back to school season made us plan more optimistically. This could have a longer-term impact on our inventory to sales ratio as we could take comparatively longer time to liquidate the excess inventory,” it said.

Commenting on the performance of the company, Neville Noronha, CEO & MD said: ”FY2021 has been a challenging year for our business. The year began amidst a strict lockdown post the emergence of the Covid-19 towards the end of the last financial year.”

”The economy gradually opened post May 2020 and the second half of the year was progressing towards recovery. However, a much stronger second wave of Covid-19 infections hit the country towards the end of FY 2021 and has once again resulted in significant disruption to our business as several cities and towns have announced restrictions,” added Noronha.

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