Avenue Supermarts Q4 results: Margins under pressure on higher costs; net profit dips to ₹551 crore
Avenue Supermarts Q4 FY25 Results: Net Profit Dips to ₹551 Crore Amid Rising Costs
Table of Contents
Financial Overview
Avenue Supermarts, the operator of DMart retail stores, has reported its Q4 FY25 results, showing mixed performance with revenue growth but margin pressure. The company’s consolidated net profit saw a slight decline to ₹551 crore from ₹563 crore in the year-ago period, while revenue increased to ₹14,872 crore from ₹12,727 crore.
Key Financial Metrics
Operational Challenges
The company faced significant operational challenges during the quarter, including increased competitive intensity in the FMCG space and higher wage costs due to skilled workforce shortages at entry-level positions.
EBITDA margins experienced pressure, declining to 6.4% from 7.4% in the previous year, while net profit margin decreased to 3.7% from 4.4%. The company has invested in improving service levels, focusing on:
- Faster inventory turnaround
- Improved checkout efficiency
- Preparation for future store openings
Business Performance
While metro locations faced some challenges, the company’s performance in non-metro areas showed stronger resilience. The business maintained its value positioning strategy despite competitive pressures.
“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.”
– Neville Noronha, CEO & Managing DirectorLeadership Transition
The company is undergoing a strategic leadership transition with CEO designate Anshul Asawa, who joined in mid-March. This transition will enable current CEO Neville Noronha to focus on:
- Accelerating store openings
- Building e-commerce capabilities
- Developing non-retail business aspects
Expansion Strategy
Avenue Supermarts demonstrated strong commitment to growth by adding 28 stores in Q4 alone, bringing the total new store additions for the full year to 50. This expansion strategy aligns with the company’s focus on long-term growth despite short-term margin pressures.
The company’s future strategy focuses on balancing growth with profitability through:
- Continued store expansion in strategic locations
- Enhancement of e-commerce capabilities
- Optimization of operational efficiency
- Strengthening market position in both metro and non-metro areas
Published on May 5, 2025
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