Avenue Supermarts Q1 preview: D-Mart operator likely to see significant earnings growth on low base

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26 Aug, 2025 12:21

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D-Mart operator Avenue Supermarts is expected to see significant earnings growth in the quarter ended June 2021 driven by a low base in the year-ago period. The company's operations were impacted in June 2020 quarter due to Covid-led lockdown.

Profit and EBITDA (earnings before interest, tax, depreciation and amortisation) growth is likely to be in triple digits, while the company has already intimated about a 31 percent year-on-year growth in revenue at Rs 5,031.75 crore, driven by higher operational store days in Q1 FY22 compared to the base quarter.

The total number of stores as of June 2021 stood at 238, said the company in its BSE filing earlier this month.

"Ramp-up in operations of D-Mart Ready will allow operations to scale rapidly. EBITDA margins are expected to expand by 380bps as sales mix during Q1 FY22 comprised mainly grocery items, while EBITDA will grow by around 205 percent," said Prabhudas Lilladher which sees a 288 percent jump in profit YoY.

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Motilal Oswal expects a 332 percent year-on-year increase in the company's profit and 171 percent growth in EBITDA. According to the brokerage, the company may add 30 new stores in FY22, implying an additional 26 stores in 9M FY21.

Avenue Supermarts shares rallied 22 percent so far in 2021 so far. It has rallied about 46 percent in the last 12 months.

Prabhudas Lilladher rated D-Mart as its top pick in the universe with a buy rating as it feels the company will accelerate growth given steady store expansion plans, consolidated modern trade structure, and rising scalability of D-Mart Ready with sales of fresh stuff and General merchandise on the App.

Key things to watch out for will be store addition rate, and gross margin trend, said IDBI Capital.

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