Avenue Super. Q1 FY27 Results (NSE: DMART)
Signal: Growth decelerated
The read
Revenue growth of 15% YoY remains healthy, but same-store sales growth (stores older than 2 years) decelerated to 5.5% from 7.1% a year ago, with large metros flat. EBITDA margin improved slightly to 8.0%. Bottom line was dragged by e-commerce losses; standalone PAT grew faster at 12.8%. The company continues to add stores (3 net new) and rationalize e-commerce footprint.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹18,795 Cr | 14.9% | N/A |
| Net profit | ₹860 Cr | 11.3% | |
| EPS | ₹13.2 | ||
| EBIT margin | 8.0% |
P&L walk
Consolidated revenue grew 14.9% YoY to ₹18,795 Cr, driven by store additions and same-store growth, but the latter slowed. EBITDA margin improved 10bps to 8.0% as cost controls held. PAT growth of 11.3% lagged revenue due to higher depreciation and finance costs, and e-commerce losses.
Segments
Consolidated PAT of ₹860 Cr is lower than standalone PAT of ₹936 Cr, indicating that the e-commerce subsidiary (DMart Ready) incurred a loss of ~₹76 Cr in the quarter. The e-commerce business is scaling back operations, discontinuing in 7 cities to focus on 11 large metros; this restructuring may improve future profitability but adds near-term uncertainty.
Key positives
- Revenue growth of 14.9% YoY, in line with long-term trajectory
- EBITDA margin stable at 8.0% (up 10bps YoY)
- 3 new stores added, total store count at 503, expanding retail footprint
- Strong balance sheet with low debt (D/E 0.1) and zero dividend yield, indicating reinvestment capacity
Key concerns
- Same-store growth (2yr+ stores) decelerated to 5.5% from 7.1% a year ago, with large metros flat
- E-commerce subsidiary continues to incur losses, dragging consolidated PAT down by ~₹76 Cr vs standalone
- High valuation (P/E 85x) leaves little room for deceleration in growth or margin
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