Avenue Supermarts Q4 net up 52%, may face Covid hit

NEW DELHI: Avenue Supermarts Ltd's net profit for the March quarter jumped 51.6% on-year to Rs 4.35 bn. Total revenue from operations for the quarter rose 17.9% to Rs 73.03 bn.

Sequentially, net profit fell 7.5% and revenue fell 1.7%.

The company's other income rose to Rs 525.5 mn from Rs 355.9 mn year ago. In Jan-Mar, total expenditure, including finance cost, was at Rs 67.91 bn compared with Rs 58.83 bn a year ago.

Finance cost declined to Rs103 mn from Rs 124.3 mn a year ago. The company's operating margin expanded to 8.44% in Jan-Mar from 6.74% a year ago.

The company's tax outgo for the March quarter was at Rs 1.29 bn as against Rs 591.3 mn a year ago. For 2020-21 (Apr-Mar), the company's net profit fell 13.7% to Rs 11.65 bn, while total revenue fell 3.6% to Rs 237.87 bn.

The resurgence in COVID19 cases in India will keep hurting Avenue Supermarts Ltd's business as more than 80% of the company's DMart stores are operating for just four hours or less per day due to restrictions imposed by various state and local governments.

Some of the stores are even shut for one to two weeks or closed on weekends, the company said.

The restrictions and local level enforcements have become stricter in the past few weeks, which vary from store closures on certain days or for extended periods, to lower number of operating hours and sale of only essential goods in most cities and towns, the company said in a press release over the weekend.

Besides the warning about revenues being lower, the company has raised alarm over excess inventory of goods, which could hit the company's financials for the near-term as it will take a long time to sell the current stock.

Given the receding threat of the pandemic in December and January, the company had been optimistic in gauging demand during the summer.