Avenue Supermarts, which owns and operates DMart retail chain, announced an 88 percent decrease in its consolidated net income for the quarter ended June 30th, 2020 on Saturday. For its declining net income, the company attributed COVID-19 to ₹40 crores as against ₹323 crores in the year-ago period. Commenting on the company’s financial results Neville Noronha, CEO & Managing Director, Avenue Supermarts Limited, said: “COVID-19 continued to spread around the country, with the resultant restrictions having a major effect on our quarterly operational and financial performance. Our quarterly sales, EBIDTA and PAT, were slightly lower than the same period ago.
The consolidated total income of the company fell by 32% to ₹3,933 crores as against ₹5,826 crores in June 2019. EBITDA in quarter 1 of the financial year 2020 stood at ₹0.62, as compared to ₹5.18 for quarter 1 the financial year 2019. EBITDA in Q1 FY20 stood at ₹112 crores, as compared to ₹597 crores in Q1 FY19. EBITDA margin stood at 2.9% in Q1FY20 as compared to10.3% in Q1FY19Noronha also added that when the stores were allowed to operate .without any hindrances, they were able to recover 80% sales of pre-COVID sales level in most of their stores. Uninterrupted consumption especially in non-FMCG categories is under pressure, which has a negative impact on the gross margin levels.
DMart has been able to pay wages to its employees, provide shoppers with their basic needs, and make payments to the suppliers and other service providers because of being in the essential products business. In the current scenario, this is very much satisfying for them. DMart official said that after the passing of three months we can claim with more certainty that our store ownership business model, steady incremental storage additions over time, and a strong emphasis on cost efficiency during normal times has enabled the company to face the pandemic shocks with relatively less damage. Although we’re in the midst of the pandemic’s second wave and market outlook may continue to seem unpredictable, we are less worried than we were at the start of April 2020.
Sales in Mumbai have grown very well under their platform DMart ready sales. DMart has started home deliveries using the online application developed by them through their stores across the rest of the cities. Later their stores were allowed to operate as the complete lockdown was reduced.
