Avenue Supermarket (Dmart)

Incorporated in 2002, Avenue Supermarts Limited is Mumbai based

supermarket chain D-Mart. Company is among the largest and the most
profitable F&G retailer in India. Commpany offer a wide range of products with
a focus on the Foods, Non-Foods (FMCG) and General Merchandise & Apparel
product categories.

Company has 112 stores located across 41 cities in India. Company operate and
manage all its stores. Company also operate distribution centres and packing
centres which form the backbone of the supply chain to support its retail store
network. Company has 21 distribution centres and six packing centres in
Maharashtra, Gujarat, Telangana and Karnataka.

Company Promoters:

The Promoters of the Company are:

1. Radhakishan S. Damani;
2. Gopikishan S. Damani;
3. Shrikantadevi R. Damani;
4. Kirandevi G. Damani;
5. Bright Star;
6. Royal Palm Trust;
7. Bottle Palm Trust;
8. Mountain Glory Trust;
9. Gulmohar Trust; and
10. Karnikar Trust

Objects of the Issue:

The net proceeds of the IPO are proposed to be used as set forth below:

1. Repayment or prepayment of a portion of loans and redemption or earlier

redemption of NCDs availed by the Company;
2. Construction and purchase of fit outs for new stores;
3. General corporate purposes.

Performance of the company so far

hares of Avenue Supermarts, which owns and operates retail chain D-Mart, hit a new high of
Rs 5,899.90 as they rallied 11 per cent on the BSE in Monday’s intra-day trade following its
quarterly results. The company on Saturday reported a twofold increase in its consolidated
net profit at Rs 417.76 crore for the second quarter ended September 2021 (Q2FY22). The
company had posted a net profit of Rs 198.53 crore in Q2FY21.

In the past seven trading days, the stock has zoomed 40 per cent from the level of Rs 4,219
touched on October 6, 2021. At 09:29 am, the stock erased most its gains and was up 3 per
cent at Rs 5,479.50 on the BSE, as compared to a 0.86 per cent rise in the S&P BSE Sensex.

As guided by the management in its pre-quarterly update, Avenue Supermarts reported

revenue growth of 47 per cent year-on-year (YoY) to Rs 7,789 crore during the quarter under
review as against Rs 5,306 crore in the corresponding quarter of the last fiscal. The company
added eight new stores during the reported quarter.

Revenue per square feet was at Rs 8,400 against Rs 9,216 crore in Q2FY20 (~91 per cent of
pre-Covid levels). Owing to positive operating leverage, earnings before interest, tax,
depreciation and amortisation (EBITDA) margins improved 240 basis points YoY to 8.6 per
cent.

Covid-19 related lockdown restrictions were eased further during this quarter. Revenue in
the DMart stores grew by 46.6 per cent over the corresponding quarter of last year. Two years
and older DMart stores grew by 23.7 per cent in the month of September 2021 as compared
to September 2020. We have 187 stores that are 2 years or older,” the management said.

The company had accelerated its capex momentum in H1FY22 undertaking capex worth Rs
1,036 crore versus Rs 651 crore in H1FY21. CWIP was at a healthy Rs 1224.6 crore, which
indicates a strong store addition pipeline for FY22E, ICICI Securities said in a note.

Inventory increased by around Rs 500 crore in H1FY22, signalling healthy stocking for the
upcoming festive demand. The company appears well placed to capitalise on a strong
anticipated festive season and a healthy store addition pipeline (~40 stores in FY22) would
further augment the revenue growth, going forward, the brokerage firm said. “Though we
continue to remain structurally positive on the stock, we believe recent appreciation of the
stock price (around 58 per cent in the last three months) factors in most positives,” it added.