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    Avenue Supermarts Ltd. Results – Q2 FY21

    Published on October 18, 2020

    Mumbai : Avenue Supermarts Ltd. (ASL), one of the largest food & grocery retailers in India, today declared its standalone and consolidated financial results for the quarter and half year ended September 30, 2020.

    Standalone results

    Total Revenue for the quarter ended September 30, 2020 stood at Rs. 5,218 crore, as compared to Rs. 5,949 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q2FY21 stood at Rs. 325 crore, as compared to Rs. 515 crore in the corresponding quarter of last year. EBITDA margin stood at 6.2% in Q2FY21 as compared to 8.7% in Q2FY20.

    Net Profit stood at Rs. 211 crore for Q2FY21, as compared to Rs. 333 crore in the corresponding quarter of last year. PAT margin stood at 4.0% in Q2FY21 as compared to 5.6% in Q2FY20.

    Basic Earnings per share (EPS) for Q2FY21 stood at Rs. 3.25, as compared with Rs. 5.34 for Q2FY20.

    Total Revenue for H1FY21 stood at Rs. 9,051 crore, as compared to Rs. 11,730 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in H1FY21 stood at Rs. 434 crore, as compared to Rs. 1,111 crore during H1FY20. EBITDA margin stood at 4.8% in Q2FY21 as compared to 9.5% in Q2FY20.

    Net Profit stood at Rs. 260 crore for H1FY21, as compared to Rs. 669 crore in H1FY20. PAT margin stood at 2.8% in Q2FY21 as compared to 5.7% in Q2FY20.

    Basic Earnings per share (EPS) for H1 FY21 stood at Rs. 4.02, as compared with Rs. 10.72 for H1FY20.

    Consolidated results

    Total Revenue for the quarter ended September 30, 2020 stood at Rs. 5,306 crore, as compared to Rs. 5,991 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q2FY21 stood at Rs. 330 crore, as compared to Rs. 517 crore in the corresponding quarter of last year. EBITDA margin stood at 6.2% in Q2FY21 as compared to 8.6% in Q2FY20.

    Net Profit stood at Rs. 199 crore for Q2 FY21, as compared to Rs. 323 crore in the corresponding quarter of last year. PAT margin stood at 3.7% in Q2FY21 as compared to 5.4% in Q2FY20.

    Basic Earnings per share (EPS) for Q2FY21 stood at Rs. 3.07, as compared with Rs. 5.17 for Q2FY20.

    Total Revenue for H1FY21 stood at Rs. 9,189 crore, as compared to Rs. 11,805 crore in the same period last year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in H1FY21 stood at Rs. 441 crore, as compared to Rs. 1,114 crore during H1FY20. EBITDA margin stood at 4.8% in Q2FY21 as compared to 9.4% in Q2FY20.

    Net Profit stood at Rs. 239 crore for H1FY21, as compared to Rs. 646 crore in H1FY20. PAT margin stood at 2.6% in Q2FY21 as compared to 5.5% in Q2FY20.

    Basic Earnings per share (EPS) for H1FY21 stood at Rs. 3.68, as compared with Rs. 10.35 for H1FY20.

    D-Mart follows Everyday low cost – Everyday low price (EDLC-EDLP) strategy which 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.

    Commenting on the performance of the company Mr. Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said:

    DMart (Brick and Mortar) Business Overview

    Lockdown restrictions due to Covid-19 were further eased during this quarter. Within the continued uncertainty from Covid-19, our business has seen improvement and it continues to gradually progress towards prepandemic levels. Month-on-Month sales have improved during this quarter – August was better than July and September was better than August. The highlight being that footfalls continue to be significantly lower than pre-Covid levels but basket values are significantly higher than pre-Covid levels. Both these data points are trending towards pre-Covid levels. Footfalls are getting better and basket values are reducing month over month.

    Two years and older DMart stores did 87.5% of September 2019 sales in the month of September 2020. We have a total of 158 stores which are 2 years or older. Since August, most of our stores are operating at pre-Covid operating hours and some stores are operating longer hours than before Covid-19. Longer hours are to improve social distancing and giving more options to our shoppers.

    FMCG and staples demand remains robust. September 2020 sales of all stores exceeded September 2019 sales for FMCG and Staples while General Merchandise and Garments did lesser sales in the same period. However, discretionary consumption has seen significant improvement over Q1FY21. We were at 22.7% revenue contribution from General Merchandise and Apparel business in Q2FY21 as compared to the usual 27.3% contribution for the year. We couldn’t sell this category of products for nearly 2 months of Q1FY21 due to regulatory restrictions and once permitted we did insignificant sales due to tightening of discretionary spend by consumers. Almost all of the shopping in Q1FY21 was need based and essential in nature. In light of that, Q2FY21 sales contribution from General Merchandise and Apparel is encouraging.

    New Stores Opening

    We continue to focus on new store openings and have opened six new DMart stores during the quarter. We have closed two of our Mumbai stores for customers and converted them into fulfilment centres (FC) for our Ecommerce business. One each in Mira Road and Kalyan. Both these locations have an alternate DMart store within 4 kms.

    DMart Ready

    We continue to increase our footprint in Mumbai Metropolitan Region covering additional pin codes. Mira Road and Kalyan FC addition was to deepen our reach and serve customers better in these regions.

    We have also expanded our E-Commerce operations in select pin codes of Pune City.

    Our Employees, Associates and Customers

    Our precautions continue to be as stringent as before to ensure our employees are safe and customers are assured of a 100% safe environment to shop. We continue with all our Covid-19 specific policies around leaves and benefits so each employee and associate is encouraged to be safe and responsible if she or he or their family member is showing any Covid-19/flu-type symptoms.

    Conclusion

    The progress of the pandemic and its impact on consumer spending during the festival period will determine our financial performance for the next quarter. While large suppliers and FMCG business is trending better on sales as well as supplies, supply chains and manufacturing in the non FMCG SME sector will take some time to get back to pre-Covid levels. Longer lead times, a slower response to immediate demand and the biggest festivals so close on the anvil would be more complicated for the non FMCG SME sector. We are providing all necessary support and it’s a matter of time to get all back on schedule. We are glad to state that conversations are now moving from lack of demand to shortage of supplies in these categories.

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