AVENUE SUPERMART LTD.

Beginning
By the late 1990s, our founder, Mr. Radhakishan Damani, was already established as one of the
more successful and well-known value investors in the Indian equity markets

DMart took eight years to start its first ten stores. This wasn’t because of dearth of investment
opportunities, but more because of his belief in the importance of validating the business model
from a perspective of both profitability and scalability. His beginnings at DMart were frugal. For a
number of years since inception, DMart’s corporate operations were run from a small space, carved
out from one of the early stores. He and his early leadership team worked together as one cohesive
unit without any hierarchy or barriers.

Today, DMart continues to focus on this early belief system created during our formative years. We
have a good blend of entrepreneurial spirit and high-quality execution. We humbly attribute our
success to the values and the way of business thinking that our founder has instilled in us.

VISION & MISSION

At DMart, we continuously research, identify and make available new products and
categories to fulfil our customers’ everyday needs at the best value. Our mission is to be
the lowest priced retailer in our area of operation.
Presence and Expansion Strategy
We follow a cluster-based expansion approach. We thus focus on deepening our penetration in the
areas where we are already present, before expanding to newer regions. Using this strategy, we
added 38 stores in FY 2019-20, thus ending the year with 214 stores, spread across 11 states and one
union territory.

It  is primarily engaged in the business of organized retail and operates supermarkets

Its Brand Name is D mart

It operates 234 stores across 11 states and one union territory with a 11.8 million square ft retail
business area.
AVL has its highest presence in Maharashtra with 58 stores and followed by Gujarat with 26
stores.

Its market cap is 2,59,330.88 Cr.

ROCE IS 12.7%
ROE IS 9.45%

Product Category
. The products on offer at our stores can be broadly classified into three categories – Foods,
Non-foods and General Merchandise and Apparel.
Revenue breakup 
 AVENUE SUPERMART LTD.
The company derives 52% of the revenue from Food segment, 20% from the FMCG segment
and the remaining is contributed by the General Merchandise and Apparel segment. The
company Sales revenue per retail business per square ft is Rs 32,879 for FY20 .

Previous 5-year Price chart

PROS

 Company is almost debt free.

CONS

 Stock is trading at 21.26 times its book value

 Though the company is reporting repeated profits, it is not paying out dividend
 Company has a low return on equity of 13.16% for last 3 years.

Peer comparison

Qtr Qtr
Mar NP Sales Sales
S.No. Name CMP Rs. P/E Profit ROCE %
Cap Rs.Cr. Qtr Rs.Cr. Qtr Rs.Cr.
Var % Var %

1. Avenue Super. 4177.95 182.91 270637.00 552.56 23.62 9217.76 22.22 12.71
 AVENUE SUPERMART LTD.
2. Trent 1270.80 310.36 45175.31 139.69 88.95 1499.08 75.61 2.02

3. Vedant Fashions 1042.70 196.25 25305.80 127.80 24.14 384.75 27.59 14.63

4. Metro Brands 587.75 233.98 15957.83 101.27 56.89 483.77 59.03 9.59

5. Medplus Health 988.50 184.66 11793.36 17.17 -25.05 933.45 16.54 12.70

6. V-Mart Retail 3590.00 554.31 7090.01 57.11 19.30 692.02 47.23 4.11

7. Arvind Fashions. 293.95 3892.22 6.31 109.28 1007.99 30.36 -12.18

Management discussion and analysis

ECONOMIC OVERVIEW

The Indian economy started FY 2019-20 on a cautious sentiment, with the overhang of general
elections and the muted credit growth scenario. In the first two quarters, the overall demand
remained weak, with consumption and investment remaining conservative. However, from the
October-December quarter onwards, the situation started improving as the government, along with
the central bank, undertook both fiscal and monetary policy measures to revive the economy

The central government, state governments and all the local authorities have taken several steps to
support the economy and ensure the safety of the citizens

In FY 2020, the country has grown at a rate of 4.2% (Source: International Monetary Fund).

The short-term outlook remains unpredictable as the spread of the pandemic is still being
evaluated in the country, and next steps are being charted out as the situation progresses.
However, the strong enablers that characterise the Indian economy – a young working population,
a stable government, rising competitiveness and improving index of ease of doing business – are
expected to reconfirm the country’s long-term growth trajectory

INDUSTRY OVERVIEW
AVENUE SUPERMART LTD.
Sector growth is primarily driven by rapid urbanisation, changing demographic profile, increasing
middle-class disposable incomes, increased digitalisation and technology adoption, evolving
preferences, brand awareness and rising discretionary spending. The rising e-commerce wave also
significantly contributed to the overall growth of the sector.

The current pandemic could significantly alter new store roll out strategy for the industry. Several
retail businesses are witnessing extended store closures, lower footfalls and lean demand.
Consumers are also focused more on consumption of essentials. Industry growth for the next few
years will therefore depend on the severity of the pandemic in the country.

E-retail, but has gained significant attention in the last few months as consumers have rapidly
adopted online ordering of household grocery and other items. Apart from this, e-retailers continue
to focus on existing business segments, such as electronics, apparel and fashion.

Overall, the retail sector faces key threats in the form of economic headwinds such as GDP
slowdown due to COVID-19, decreased rural spending and rising commodity prices as well as e-
tailing, which have affected the growth of the brick and mortar businesses.

BUSINESS OVERVIEW
Avenue Supermarts Limited (DMart) is a national supermarket chain, with a focus on value-retailing.
We offer a wide range of products with a focus on the Foods, Non-Foods (FMCG) and General
Merchandise & Apparel product categories.

We remain focussed on our strategy of offering our customers good quality products at great value,
based on the Everyday Low Cost/Everyday Low Price (EDLC/EDLP) principle.

We believe our endeavor to facilitate one-stop shop convenience for our customers’ everyday
shopping needs, along with our competitive pricing due to our local market knowledge, careful
product assortment and supply chain efficiencies, has helped us achieve steady growth.
AVENUE SUPERMART LTD.