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Avenue Supermarts Q2 preview: Street expects revenues at Rs 7,850 crore, margins around 8.5%

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Avenue Supermarts, the company operating the hypermarket DMart chain of retail stores, is set to announce its July-September quarter results on Saturday. The Street expects the revenues to be close to Rs 7,850 crores on the top line.

Avenue Supermarts, the company operating the hypermarket DMart chain of retail stores, is set to announce its July-September quarter results on Saturday. The Street expects the revenues to be close to Rs 7,850 crores on the top line.
The math behind the number is: store revenues have actually grown by 47 percent year-on-year, which comes closer to Rs 7,650 crores, as per Avenue Supermart's second-quarter updates. Moreover, they have added eight stores in the quarter gone by as compared to four stores added in the April-June quarter.
The Street is counting on the Rs 7,650 crore revenue coming in from the stores and another Rs 100-200 crore from D-Mart's e-commerce business, taking it close to Rs 7850 crores on the top line.
The hypermarket major's EBITDA is expected to be around Rs 670 crores, which grows much faster than what it was last year, which was on account of a favourable base. Margins are expected to be around 8.5 percent and the net profit as a result of which grows 120 percent to around Rs 435 crores.
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Ecommerce revenue is something that the street will be watching out for in terms of the top line and the commentary on gross margins and margins will be extremely crucial.
The D-Mart owner company posted a jump of 132 percent year-on-year in the standalone net profit at Rs 115 crore for the quarter ended June 30, while the total revenue for Q1 FY22 was up 31.3 percent at Rs. 5,032 crore.
Avenue Supermarts is currently trading at 135 times FY23 earnings at a market cap of 3.5 lakh crore. On Thursday, Avenue Supermarts' share price settled at Rs 5,360 on NSE, gaining 4.75 percent.
So far this year, the stock has returned over 90 percent to investors. It has delivered over 750 percent returns since its listing in March 2017, rising from around Rs 600 apiece to the current levels.