Companies

D-Mart’s margins under pressure, revenue up 33%

Our Bureau Mumbai | Updated on January 12, 2019 Published on January 12, 2019

D-Mart follows a strategy of "Everyday low cost - Everyday low price (EDLC-EDLP)"

ASL’s net profit during the third quarter of FY 19 stood at Rs 257 crore

Avenue Supermarts Ltd (ASL), which owns and operates the supermarket chain D-Mart, has posted a 33.2 per cent growth in its revenues at Rs 5,451 crore in the quarter ending December 31, 2018. The company’s revenues for the same period, a year ago, stood at Rs 4,094 crore.

ASL’s net profit during the third quarter of FY 19 stood at Rs 257 crore, up marginally from Rs 252 crore in the same period last year. The profit margins have declined during the quarter. PAT margin was at 4.7% in Q3FY19 as compared to 6.1% in Q3FY18.

Neville Noronha, Chief Executive Officer (CEO) and Managing Director (MD), Avenue Supermarts Limited, said, “Topline continued to grow well even though PAT growth remained flat vis a vis the corresponding quarter last year, primarily due to Gross Margin reduction on account of price cuts. We constantly strive to give better prices to consumers and our cost leadership allows us to do that.”

He further added that the operating costs inched upwards due to pre-loading of certain expenses primarily around capability building across infrastructure and people.

“Good times allow us to invest for the future right now. We also overspent a little to manage the festival season better through longer operating hours. We continue to operate longer hours in certain stores even after the festive period,” Noronha said.

D-Mart follows a strategy of “Everyday low cost - Everyday low price (EDLC-EDLP)” that aims at procuring goods at competitive price, using operational and distribution efficiency and thereby delivering value for money to customers by selling at competitive prices.

Published on January 12, 2019
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