Avenue Supermart, the operator of D-Mart retail chain, witnessed a 4% slide in share price as investors queue up to liquidate their position following the disappointing fiscal first quarter (Q1FY21) performance.
The Radhakrishnan Damani owned company reported 88% decline in profit for the April-June quarter as demand for non-essential items was hit amid the Covid, pandemic. Avenue Supermart shares fell as much as 6.14% on the NSE to an intraday low of Rs 2,180.
Avenue Supermarts on Saturday reported 87.61% annual decline in its consolidated net profit at Rs 40 crore for the April to June quarter as compared to a net profit of Rs 323 crore in the corresponding quarter of last year. Its net profit margin stood at just 1% in Q1 as compared to d to 5.5% in the year-ago quarter.
The DMart supermarket chain operators’ consolidated total revenues fell 33% to Rs 3,883 crore from Rs 5,815 crore in the year-ago quarter. Covid-19 spread across the country has delayed return of normalcy in operations. The ensuing restrictions have had a significant impact on DMart’s operational and financial performance in the quarter.
Although, DMart stores were allowed to operate unhindered it saw recovery at 80% or more of pre-COVID sales.
But discretionary consumption continues to be under pressure, especially in the non-FMCG categories. This has impacted its the gross margins negatively. Store operations and duration of operation per day continue to remain inconsistent across cities due to strict lockdowns enforced by local authorities from time to time. In addition, in certain cities, authorities are once again insisting on selling only essential products. Hence our future revenues continue to remain uncertain.
Avenue Supermarts has 216 stores with the retail business area of 80 lakh square feet across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh and Punjab.
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