Avenue Supermart announces weak Q1FY21 results

Avenue Supermarts Ltd (ASL) declared its standalone and consolidated financial results for the quarter ended June 30, 2020.

The total revenue for Q1FY21 stood at Rs 3,883 crore, as against Rs 5,815 crore in Q1FY20, showing a decrease of around 33 per cent. EBITDA in Q1FY21 stood at Rs 112 crore, as compared to Rs 597 crore in Q1FY20. EBITDA margin too showed a significant drop of 2.9 per cent in Q1FY21 as compared to 10.3 per cent in Q1FY20. Meanwhile, net profit is Rs 40 crore for Q1FY21, as compared to Rs 323 crore in the corresponding quarter last year. PAT margin stood at 1.0 per cent in Q1FY21 as compared to 5.5 per cent in Q1FY20.

General Merchandise & Apparel constitute around one-fourth of the total revenue. This segment continues to be under constant pressure for the past few months and is impacting gross margins negatively. The duration of operation also continues to remain inconsistent across cities due to strict lockdowns enforced by respective local authorities from time to time thereby, affecting revenue.

In addition to this, certain city authorities are once again insisting on selling only essential products in a quest to reduce the spread of the pandemic. Hence, future revenues continue to remain uncertain.

D-Mart has a total of 196 stores, with the majority being in Maharashtra (74). Maharashtra, which is one of the most affected regions in India suffering from the COVID-19 crisis, has undoubtedly hit D-Mart’s revenue in the past few months.

Since the beginning of 2020, the stock has given a return of 27.03 per cent, outperforming the broader market index Nifty50, which gave a return of -11.61 per cent