Radhakishan Damani, who is a notable Indian businessman and investor and is the founder of the DMart retail chain, found his net worth slip after the giant retail chain announced its Q4 financial results.
With a market capitalization of Rs 2,57,238 crores, the shares of Avenue Supermarts Ltd are currently trading at Rs 3,953 per share, down by 27.8 percent from its 52-week high of Rs 5,485. The stock has given a negative return of 14.14 percent in the last one year.
Financial Highlights
Avenue Supermarts Ltd reported a consolidated revenue of Rs 59,358 crores in FY25, up by 16.88 percent from its FY24 revenue of Rs 50,789 crores. It increased by 16.86 percent YoY from 12,727 crores in Q4 FY24 to 14,872 crores in Q4 FY25. However, on a QoQ basis, it declined by 6.89 percent from 15,973 crores in Q3 FY25 to 14,872 crores in Q4 FY25.
It posted a net profit of Rs 2,707 crores in FY25, up by 6.75 percent, from its FY24 net profit of Rs 2,536 crores. It declined by 2.13 percent YoY from 563 crores in Q4 FY24 to 551 crores in Q4 FY25. Additionally, on a QoQ basis, it declined by 24 percent from 724 crores in Q3 FY25 to 551 crores in Q4 FY25.
The company is facing a margin squeeze due to multiple factors such as mounting competitive pressure in the FMCG space, hike in wages of initial skilled staff driven by demand-supply imbalance, sustained investment in enhancing the quality of service, and escalated cost in connection with aggressive store expansion.
As of FY25, it derives 57.73% of its revenue from food segment, 20.01% in FMCG segment, and 22.26% in the general merchandise & apparel segment. It added 50 stores in FY25, and the total stores currently operating stands at 415.
Analyst Comments
Nuvama has maintained its ‘Hold’ rating with a target price of Rs 4,273, signalling an upside of 8.3 percent. It cited that the giant chain kept expanding, with revenue growing over 15% YoY in Q4FY25 and also for FY25, and it was able to meet store expansion plans successfully. The company is, however, facing margin pressure due to the aforementioned reasons, as mentioned by the management.
Motilal Oswal has given a ‘Buy’ rating with a target price of Rs 4,350, signalling an upside of 10.3 percent. It cited that despite the company facing pressures from increased competition, Motilal Oswal remains positive, citing DMart’s value-focused model and strong store-level efficiency as key strengths that can sustain its relevance and competitiveness against the convenience-driven quick commerce trend.
Written by Satyajeet Mukherjee
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