Sharp profit revision, fewer store openings may dent prospects of DMart

Given the near-term sales headwinds, the stock could be under pressure; investors can consider the stock on dips

Topics
DMart | Avenue Supermarts | Indian stock market

Ram Prasad Sahu  |  Mumbai 

Muted sales expectations for FY22, fewer store openings, and a higher proportion of low-margin grocery (food) sales have led to sharp earnings downgrades for Avenue Supermarts or DMart for the current financial year. While the margin profile was improving as reflected in the March quarter performance and management commentary, given the lockdown in multiple states, the trend is expected to reverse.

The operating profit margin for the quarter was higher by 157 basis points, to 8.3 per cent. The company indicated there had been a revival in discretionary spends not seen in the previous three ...

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, May 09 2021. 20:44 IST
RECOMMENDED FOR YOU
.