Avenue Supermarts Q4 results: Margins under pressure on higher costs; net profit dips to ₹551 crore

Avenue Supermarts added 28 stores in the quarter and overall 50 stores in the full year
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RAMAKRISHNA G

Retailer Avenue Supermarts’ net profit in the March quarter saw a slight fall from year ago on higher costs, though the company’s revenue rose led by growth in home delivery sales.

EBITDA margins came under pressure during the quarter which the company attributed to increased competitive intensity in the FMCG space.

The company reported consolidated net profit of ₹551 crore in Q4 FY25 compared to ₹563 crore in the year-ago period. Revenue at ₹14,872 crore was higher than the ₹12,727 crore reported year ago.

Apart from the competitive intensity the company’s margins were also hit by a surge in wages at entry level positions during the quarter “due to demand, supply mismatch of skilled workforce,” the retailer said.

It also invested more in improving service levels for faster turnaround on availability, checkouts, and future store openings.

“While overall gross margins in the matured metro towns will remain soft for a certain period of time, our value positioning is well anchored in the minds of the shoppers of DMart Stores,” said Neville Noronha, CEO & Managing Director. He added that CEO designate Anshul Asawa, who had joined in mid-March was 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,” Noronha said.

The overall business was resilient in metro towns, but the performance was better in non-metros.

EBITDA margin for the retailer fell to 6.4 per cent in Q4 FY25 from 7.4 per cent year ago, while net profit margin dipped to 3.7 per cent from 4.4 per cent.

The company added 28 stores in the quarter and overall 50 stores in the full year.