Avenue Supermarts Limited (DMart) is a National supermarket company  specialises in value-retailing. With an emphasis on the product categories for general merchandise and apparel, non-foods (FMCG), and foods, we provide a wide range of goods. The company sells its goods in a number of areas, including groceries and basics, dairy and frozen, fruits and vegetables, home and personal care, bed and bath, crockery, footwear, toys and games, children’s clothing, fashion for men and women, and everyday necessities. The company continues to be committed to its strategy, which is founded on the Everyday Low Cost/Everyday Low Price (EDLC/EDLP) approach and involves providing customers with high-quality items at an affordable price. The store offers give consumers a unique shopping experience, including a wide selection of affordable everyday goods presented in a contemporary setting. In 2002, the company opened its first store in Mumbai, Maharashtra. As of September 30, 2023, the company operated 336 stores in the states of Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, NCR, Chhattisgarh, and Punjab with a total retail business area of 13.9 million square feet.


Recommendation PRICE RANGE Target Price Time Horizon
Buy Rs. 3871 Rs. 4600 12 Months

Stock Details

Market Cap. (Cr.) 242235.38
Equity (Cr.) 650.73
Face Value 10
52 Wk. high/low 4602 / 3293
BSE Code 540376
Book Value (Rs.) 247.12
Industry Trading
P/E 101.18

Share Holding Pattern %


FIIs 8.31
Institutions 7.70
Non Promoter Corp. 0.22
Public & Others 9.13
Government 0.00
Total 100.00


Key Investment Rationale:

  • D-Mart deploys the Everyday low cost – Everyday low pricing (EDLC-EDLP) approach, which strives to get items at competitive rates, make use of operational and distribution efficiency, and then provide customers with value for money by offering for sale at competitive prices.

  • The management has indicated reasonable certainty that it may not announce material losses and is upbeat about the e-commerce industry. It will emphasize big-basket purchasing through retail pick-up and home delivery channels in the 22 current cities.

  • For the majority of items, the gap between D-Mart Ready and Big Basket (BB) widened in August 2023 as opposed to May 2023, but it varied for D-Mart Ready and Jiomart. Although quick commerce is becoming more prevalent in the grocery and food industries, D-Mart is still the most competitive player in the non-quick commerce market. thanks to:

    • An expanding pricing difference between D-Mart Ready and BB;

    • Growing customer engagement and D-Mart Ready promotion;

    • Increasing delivery fees/higher cart values for free delivery by another channel.

  • Larger stores (45k sqft.), which provide the organization the opportunity for further growth, typically mature in four to five years whereas 30-35k sqft. stores typically do so in roughly three years.

  • The general merchandise and apparel category (GM&A) is affected mostly by macroeconomic variables, although the apparel sector is also seeing rising competition. But the damage could be mitigated by additional categories (such as pharmaceuticals, etc.). The tactic of direct purchasing from grocery brands mitigates the impact of GM&A on gross margin.

State No. Of Stores
Maharashtra 103
Gujarat 57
Telangana 36
Andhra Pradesh 30
Karnataka 30
Madhya Pradesh 20
Tamil Nadu 20
Rajasthan 13
Punjab 11
Chhattisgarh 6
Daman 1

Key Product Categories:



Groceries, staples, processed foods, dairy, frozen products, beverages and confectionery, and fruits & vegetables.
Non-Foods (FMCG) Home care products, personal care products, toiletries, and other over-the-counter products.
General Merchandise & Apparel Bed & bath, toys & games, crockery, plastic goods, garments, footwear, utensils, and home appliances.


Industry Overview:

Post-COVID Recovery: The fiscal year 2022-23 was a pivotal one for the retail industry in India. After a couple of years of grappling with the impact of the COVID-19 pandemic, the industry finally saw a significant upturn. With the pandemic restrictions lifted and the economy opening up, activities resumed in full swing, leading to robust growth in the retail industry. The growth rate was a strong 15%, taking the total value of the industry to a staggering `84 trillion. This growth was primarily driven by a revival in consumption patterns and improved economic conditions. As the economy recovered, it boosted consumer sentiment, leading to an increase in discretionary spending.


Rise of Organized and E-Retail: The organized retail and e-retail sectors saw substantial growth during this period. Organized retail, which includes large-scale retail outlets and chains, grew by 20% to reach a total value of `9 trillion. This accounted for about 11% of the overall retail industry. E-retail, which includes online shopping platforms, grew at an even faster pace of 24%, reaching a total value of `3 trillion. This represents approximately 3.7% of the total retail industry. A key contributor to this growth was the food and grocery segment, which made up about 25% of the total organized retail industry in value terms.


Future Projections: Looking ahead, the retail industry is expected to maintain this momentum and continue its growth trajectory. The industry is projected to grow at a compounded annual growth rate (CAGR) of 10-11% between 2023 and 2028. This optimistic projection is based on the expectation of continued economic growth and low to moderate inflation rates. As such, the retail industry appears to be on a solid path toward sustained growth and expansion. The industry’s future looks bright, and it is expected to continue to contribute significantly to India’s economic growth.

Extract of Q2FY24 Earnings:

  • In 2QFY24, Avenue Supermarts’ (DMART) consolidated/standalone revenue increased 18.7%/18.5 YoY. The revenue increase was mostly driven by 11% YoY store openings. However, revenue/sqft, which had been a laggard, saw a rebound and climbed 6% YoY to Rs8984 during the quarter.

  • Consolidated EBITDA margin fell 40 bp YoY to 8% owing to mix-driven lower gross margin (reduced share of General Merchandise & Apparel (GM&A)) and higher opex.

  • Consolidated PBT increased 13.9% YoY to INR8.5b (a 12% miss). Reported PAT fell 9% YoY, owing mostly to reduced taxes in Q2FY23 due to a tax reversal from the prior period.

  • The shrinking difference between revenue per store and revenue per sq. ft. meant that the percentage of larger-format retailers increased, which remained highly positive. Furthermore, significant store expansions (72% during FY20-23), good cost savings, and a recovery in discretionary demand with the start of the holiday season are expected to boost growth.

  • Employee costs/other expenditures increased 19.1%/17.9% YoY to INR2.2b/INR6.2b in 2QFY24.

  • The GM&A segment’s revenue share decreased to 23.21% in 1HFY24 from 24.75% in 1HFY23, demonstrating a persistent decline in this area.

  • Bill cuts at 147m increased 36% YoY, while the average bill value decreased 13% year on year to INR1,625.

  • LTL sales increased by 8.6%, the highest figure in the previous eight quarters, except Q1FY23 due to the COVID base. The average sales per store climbed by 6.5%, compared to a 4.5% growth in the previous three quarters. Inventory turns increased from 6.7% to 7%.

  • DMART Ready (e-commerce) sales increased by 84% year on year to Rs22 billion in FY20-23. Despite the consistent rise, losses have remained flat year on year. DMART Ready’s sales have expanded 6x between FY20 and FY23, but bottom-line losses have increased 2x, demonstrating that the company’s e-commerce operations are continuously improving.

Quarterly Performance:

Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY% 6MFY23 6MFY22 YoY%
Revenue from Operations 12,624.4 11,865.4 10,638.3 6.4% 18.7% 24,489.8 20,676.4 18.4%
Other Income 36.9 38.7 35.6 -4.7% 3.8% 75.7 64.7 16.9%
Total Income 12,661.3 11,904.2 10,673.9 6.4% 18.6% 24,565.5 20,741.1 18.4%
Purchase of Stock-in-Trade 11,318.9 10,209.8 9,871.8 10.9% 14.7% 21,528.7 18,332.4 17.4%
Changes in inventories -547.0 -146.6 -842.6 -693.6 -905.6
Employee expenses 224.7 206.1 188.6 9.1% 19.1% 430.8 368.0 17.1%
Other Expenses 622.9 560.8 528.5 11.1% 17.9% 1,183.7 981.3 20.6%
EBITDA 1,004.9 1,035.3 892.0 -2.9% 12.7% 2,040.2 1,900.3 7.4%
EBITDA Margin (%) 8.0% 8.7% 8.4% -70 bps -40 bps 8.3% 9.2% -90 bps
Finance Cost 15.6 14.6 17.7 7.0% -11.8% 30.2 34.9 -13.6%
Depreciation & Amortization expenses 174.4 162.2 162.0 7.5% 7.7% 336.5 306.7 9.7%
Profit Before Tax (PBT) 851.9 897.3 748.0 -5.1% 13.9% 1,749.1 1,623.4 7.7%
Tax 227.8 238.6 62.2 -4.5% 266.0% 466.4 294.8 58.2%
Profit After Tax (PAT) 624.1 658.7 685.7 -5.3% -9.0% 1,282.8 1,328.6 -3.5%
PAT Margin (%) 4.9% 5.6% 6.4% -70 bps -150 bps 5.2% 6.4% -120 bps
EPS (in Rs.) 9.58 10.14 10.58 -5.5% -9.5% 19.72 20.51 -3.85%

Profit and Loss Statement:  

Particulars (In Rs. Cr.) FY21 FY22 FY23
Revenue from Operations 24,143.06 30,976.27 42,839.56
Other Income 196.21 117.49 129.34
Total Income 24,339.27 31,093.76 42,968.90
Cost of materials consumed 20,855.56 26,891.77 36,884.71
Changes in inventories -300.88 -494.38 -500.82
Employee expenses 536.57 616.21 746.97
Other Expenses 1,308.76 1,464.17 2,071.67
EBITDA 1,939.3 2,616.0 3,766.4
EBITDA Margin (%) 8.0% 8.4% 8.8%
Finance Cost 41.65 53.79 67.41
Depreciation and amortization expenses 414.16 498.08 638.87
Profit Before Tax 1483.45 2064.12 3060.09
Tax 384.02 571.72 681.75
Profit After Tax 1099.43 1492.40 2378.34
PAT Margin (%) 4.6% 4.8% 5.6%
EPS (in Rs.) 16.97 23.04 36.72

Key Ratios:

Key Ratios FY21 FY22 FY23
Debt to Equity 0.03 0.04 0.04
Current Ratio 3.28 3.05 3.04
ROCE (%) 12.71 15.74 20.14
ROE (%) 9.45 11.54 15.99
EBITDA Margin (%) 7.35 7.71 7.99
PAT Margin (%) 4.17 4.4 5.04
P/E 158.65 160.3 86.31
P/B 15.02 18.61 13.37
EV/EBITDA 94.2 98.1 57.47
Market Cap/Sales 7.1 7.8 4.8

Balance Sheet:      

Particulars (In Rs. Cr.) FY21 FY22 FY23
Non-Current Assets
Property, plant and equipment 5938.50 7770.46 9725.61
Right of use assets 960.24 1388.65 1504.88
Capital work-in-progress 1019.59 1129.34 829.16
Goodwill 78.27 78.27 78.27
Intangible assets 22.22 13.61 23.18
Investment properties 9.57 9.03 8.54
Investments 0.01 0.01
Other non-current financial assets 1109.28 1262.70 108.55
Income tax assets (net) 1.63 2.28 17.50
Deferred tax assets (net) 0.92 1.66 1.77
Other Non-Current Assets 454.62 373.78 360.43
Total non-current assets 9595 12030 12658
Current Assets
Inventories 2248.28 2742.66 3243.48
Investments 2.95 5.93 202.19
Trade receivables 43.58 66.89 62.16
Cash and cash equivalents 191.50 95.12 207.15
Bank Balances 1254.08 203.46 1201.18
Other financial assets 167.91 127.46 316.77
Other current assets 152.83 201.33 215.46
Total current assets 4,061 3,443 5,448
Total Assets 13,656 15,473 18,106
Equity and Liabilities
Equity Share Capital 647.77 647.77 648.26
Other Equity 11535.94 13029.87 15,430.44
Total Equity 12,184 13,678 16,079
Non-Current Liabilities
Lease Liabilities 312.01 507.15 476.66
Provisions 2.45 4.87 6.41
Deferred Tax Liabilities (Net) 51.19 64.03 76.96
Other Non-Current Liabilities 0.44 0.41 0.47
Total Non-Current Liabilities 366 576 561
Current Liabilities
Lease Liability 80.70 139.79 166.32
Trade payables 578.13 589.20 753.79
Other current financial liabilities 269.78 282.92 289.46
Other current liabilities 112.66 58.37 121.18
Provisions 40.73 36.44 50.87
Current tax liabilities (net) 23.77 111.57 85.39
Total Current Liabilities 1,106 1,218 1,467
Total Liabilities 1,472 1,795 2,028
Total Equity and Liabilities 13,656 15,472 18,106

Cash Flow Statement:

Particulars (In Rs. Cr.) FY21 FY22 FY23 6MFY22 6MFY23
Cash Flow from Operating Activities
Profit from Operations 1483 2064 3060 1623 1749
Depreciation & Amortizaion 414.2 498.1 638.9 306.7 336.5
Finance Cost 41.7 53.8 67.4 34.9 30.2
Increase/Decrease in Working Capital -127.1 -582.5 -319.9 -688.2 -831.8
Others -175.4 -100.9 -107.3 -57.2 -67.2
Taxes Paid -261.6 -560.3 -708.9 -378.4 -309.7
Net Cash Flow from Operating Activities 1375 1372 2630 841 907
Cash Flow from Investing Activities
Fixed Assets Purchased -2029.4 -2410.4 -2405.0 -975.1 -1430.3
Free Cash Flow 919.4 1120.9 91.9 227.0 519.9
Net Cash Flow from Investing Activities -1110 -1289 -2313 -748 -910
Cash Flow from Financing Activities
Proceeds from of exercise of share options 0.0 0.0 14.6 0.0 74.1
Proceeds from share application money pending allotment 0.0 0.0 0.9 0.0 0.0
Proceeds from short term borrowings/ debentures -37.7 0.0 0.0 0.0 0.0
Payment of lease liability -98.2 -125.5 -153.3 -68.5 -81.3
Net Interest Paid -43.6 -53.8 -67.4 -34.9 -30.2
Net Cash Flow from Financing Activities -179.5 -179.2 -205.1 -103.4 -37.4
Net Cash Flow for the Year 85.6 -96.4 112.0 -10.4 -40.5


Avenue Supermarts Ltd (DMart) owns and operates India’s most profitable supermarket, DMart. It provides products like Food, Non-Food (FMCG), General Merchandise and apparel through 336 stores, and has managed to maintain its EBITDA margin despite weak SSSG (Same-store sales Growth), thanks to cost-control measures. The expectation is for SSSG to recover in FY24 due to easing inflation and increased store productivity. Despite global economic uncertainties and geopolitical tensions, the domestic economy remains strong due to urbanization, and favorable demographics. In India, the organized grocery retail business penetration is at 4-5%, leaving plenty of headroom for the company to expand. DMart’s strategy focuses on providing quality products at a great value, creating a unique shopping experience for customers. This approach, combined with local market knowledge and supply chain efficiencies, has led to steady growth. Additionally, DMart’s unique strategy of EDLC/EDLP (Everyday Low Cost/Everyday Low Price), coupled with a diverse product range, offers a one-stop shopping solution. The company’s focus on customer needs and competitive pricing has also played a significant role in its success. Despite the uncertain global economic climate, DMart’s future looks promising, thanks to its robust business model and India’s resilient economy. With this in mind, investors are advised to consider Avenue Supermarts as a favorable investment option, particularly for those with a long-term investment horizon. Hence, investors can buy the stock with a target of Rs.4600 for the horizon of 12 months.

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