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Key Points

Avenue Supermarts, the operator of DMart, experienced a significant drop in net profit during Q4 FY25, reporting challenges in the competitive retail landscape. The company's total expenses increased, while store growth and margins showed signs of pressure from market dynamics. CEO Neville Noronha highlighted issues like rising wages and competitive FMCG markets as key factors impacting performance. The company is preparing for leadership transition with Anshul Asawa joining as CEO Designate, signaling potential strategic shifts in the near future.

Key Points: DMart Q4 Profit Drops as Radhakishan Damani Faces Margin Challenges

  • DMart net profit falls 23.4% in Q4 FY25
  • Expenses surge to Rs 14,176 crore
  • Store growth slows to 8.1%
  • EBITDA margin drops to 6.4%
2 min read

DMart operator Avenue Supermarts' net profit dips in Q4 FY25, expenses soar

Avenue Supermarts reports Q4 net profit decline amid competitive FMCG market and rising operational expenses

"Increased competitive intensity in the FMCG space has impacted our gross margins - Neville Noronha, CEO"

New Delhi, May 3

Radhakishan Damani-founded Avenue Supermarts Ltd, which operates supermarket chain DMart, on Saturday reported a significant dip in its consolidated net profit at Rs 550.79 crore in the Q4 of FY25, from Rs 719.28 crore in the year-ago quarter (Q4 FY24).

Total expenses also soared to Rs 14,176.61 crore in Q4 of last financial year, from Rs 12,001.22 crore in the same quarter in FY24.

According to its stock exchange filing, on the quarterly basis, total income of the company also went down to Rs 14,896.91 crore (QoQ), from Rs 15,996.69 crore (unaudited) in the previous quarter (Q3 FY24).

Neville Noronha, CEO and Managing Director, Avenue Supermarts Limited, said under the DMart (brick and mortar) business, “profit after tax (PAT) before prior period adjustments declined by 3.4 per cent over the previous year and was not in line with sales growth”.

He added that DMart stores grew by 8.1 per cent during Q4 FY25 as compared to 10.3 per cent in Q4 FY24 and the growth is primarily driven by increased footfalls.

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q4 FY25 stood at Rs 955 crore, as compared to Rs 944 crore in the corresponding quarter of last year. EBITDA margin stood at 6.4 per cent in Q4 as compared to 7.4 per cent in the year-ago quarter.

According to Noronha, three things have happened during this quarter – “increased competitive intensity in the FMCG space has impacted our gross margins; surge in wages of entry level positions due to demand / supply mismatch of skilled workforce; and continued investments in improving our service levels with respect to faster turnarounds on availability, checkouts and future store openings”.

“We also had a larger number of store openings during this quarter,” he noted.

He further stated that Anshul Asawa, the CEO Designate, “has joined us in mid-March, 2025 and is going through a detailed familiarisation and understanding of the organisation”.

“He should be taking charge of all operational aspects of the retail business in another 4-5 months. This will allow me to dedicate more time on store-opening acceleration, e-commerce capacity build-up and other non-retail aspects of the business,” informed Noronha.

- IANS

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Reader Comments

R
Rahul K.
DMart has been my go-to store for years because of their value pricing. But lately I've noticed more empty shelves and longer queues. The management should focus on existing stores' operations rather than aggressive expansion. Quality over quantity!
P
Priya M.
Not surprised by the dip in profits. DMart's competitors like Reliance Smart have better offers now. Also their stores feel more modern. DMart needs to upgrade their shopping experience while keeping prices low. 🛒
A
Amit S.
As a small investor, I'm worried about the declining margins. The management says they're investing in future growth, but when will we see results? The stock has been underperforming for months now. Need clearer communication from leadership.
S
Sunita R.
DMart is still the best for middle class families like ours. Yes profits are down, but their prices on daily essentials are still 10-15% lower than other supermarkets. Hope they don't compromise on this USP to boost margins.
V
Vikram J.
The wage increase issue shows India's retail sector is maturing. Skilled workers now have options beyond DMart. Companies must improve employee benefits to retain talent. This is good for workers but will squeeze profits short-term.
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Neha P.
Interesting to see the new CEO transition happening. Hope Mr. Asawa brings fresh ideas while maintaining DMart's core values. The e-commerce push is overdue - we need proper DMart delivery in our area! 🚚

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