Mumbai: Avenue Supermarts, which operates DMart retail stores, said its gross margins were impacted due to increased competitive intensity in the consumer goods space, rising employee costs and higher investments in service levels.
The largest listed retailer posted a 17% increase in net revenue at '14,462 crore in the quarter ended March, while net profit rose 3% to '620 crore. In FY25, its total revenue was '57,790 crore, growth of 17% on a net profit increase of 9% to '2,927 crore. The retailer's Ebitda margin was 7.9% during FY25, lowest since FY21.
"Three things have happened during this quarter-increased competitive intensity in the fast moving consumer space has impacted our gross margins, surge in wages of entry-level positions due to demand and supply mismatch of skilled workforce; and continued investments in improving our service levels with respect to faster turnarounds on availability, checkouts and future store openings," Neville Noronha, chief executive of Avenue Supermarts, said in its earnings statement, adding that overall gross margins in the matured metro towns will remain soft for a certain period of time.
The company also had higher store openings during the quarter with 28 new doors last quarter and 50 outlets in FY25. The company said its overall business continues to be resilient in metro towns, but it is doing significantly better in non-metro towns.
In January, the company announced that Anshul Asawa will replace Noronha in February 2026, after the latter chose not to continue. At present, Asawa is going through a detailed familiarisation and understanding of the organisation, and should be taking charge of all operational aspects of the retail business in another 4-5 months.
"This will allow me to dedicate more time on store-opening acceleration, ecommerce capacity build-up and other non-retail aspects of the business," said Noronha. The firm said profitability for its standalone online segment under DMart Ready could be some time away.
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"Three things have happened during this quarter-increased competitive intensity in the fast moving consumer space has impacted our gross margins, surge in wages of entry-level positions due to demand and supply mismatch of skilled workforce; and continued investments in improving our service levels with respect to faster turnarounds on availability, checkouts and future store openings," Neville Noronha, chief executive of Avenue Supermarts, said in its earnings statement, adding that overall gross margins in the matured metro towns will remain soft for a certain period of time.
The company also had higher store openings during the quarter with 28 new doors last quarter and 50 outlets in FY25. The company said its overall business continues to be resilient in metro towns, but it is doing significantly better in non-metro towns.
In January, the company announced that Anshul Asawa will replace Noronha in February 2026, after the latter chose not to continue. At present, Asawa is going through a detailed familiarisation and understanding of the organisation, and should be taking charge of all operational aspects of the retail business in another 4-5 months.
"This will allow me to dedicate more time on store-opening acceleration, ecommerce capacity build-up and other non-retail aspects of the business," said Noronha. The firm said profitability for its standalone online segment under DMart Ready could be some time away.
