Dmart Share Price Dropped 4% After Reporting Flat Q4fy25 Profit

On Monday, the Avenue Supermarts Limited, the parent company of DMart share price fall by 4 percent after reporting its Q4FY25 and FY25 financial results, reflecting mixed performance amid growing competitive pressures and strategic investments.

Q4FY25 Results

In the fourth quarter of FY25, Avenue Supermarts posted a consolidated net profit of Rs. 551 crore, marking a 2 percent decline year-on-year from Rs. 563 crore in Q4FY24. Revenue from operations climbed robustly by 17 percent to Rs. 14,872 crore compared to the same quarter last year. The company attributed this revenue growth primarily to increased footfall and the addition of new stores, with 28 new outlets launched in Q4 alone and 50 stores added over the fiscal year.

Despite top-line growth, profitability metrics showed pressure. EBITDA rose marginally by 1.2 percent year-on-year to Rs. 955 crore in Q4FY25, but the EBITDA margin contracted to 6.4 percent from 7.4 percent a year earlier. The profit after tax (PAT) margin also fell to 3.7 percent from 4.4 percent in Q4FY24.

FY25 Results

For the full fiscal year FY25, Avenue Supermarts reported a consolidated net profit of Rs. 2,707 crore, up 6.7 percent from Rs. 2,536 crore in FY24, reflecting steady but modest growth. The company’s total revenue for FY25 reached Rs. 59,358 crore, a 16.9 percent increase over Rs. 50,789 crore in the previous year. EBITDA for the year rose to Rs. 4,487 crore from Rs. 4,106 crore, but the EBITDA margin narrowed to 7.6 percent from 8.1 percent in FY24, continuing the trend of margin compression. The PAT margin also declined slightly to 4.6 percent from 5 percent in FY24.

The food segment, including grocery, dairy, fruits, vegetables, and cooking oils, contributed nearly 58 percent of the company’s revenue, while non-food segments like home care, personal care, toiletries, general merchandise, and apparel accounted for around 42 percent. The company’s strategy focused on expanding its physical store footprint alongside strengthening its e-commerce presence, particularly in urban markets.

Management View

CEO and Managing Director Neville Noronha highlighted that the company faced several headwinds that impacted margins. Heightened competitive intensity in the fast-moving consumer goods (FMCG) segment created pressure on gross margins. Additionally, the rising wages and skilled labor shortage, along with sustained investments aimed at improving service levels, such as faster product availability, checkout processes, and preparation for new store openings, have added to the costs. The revenue contribution from higher-margin non-FMCG segments like general merchandise and apparel remained flat. The company expects gross margins in the matured metro towns to be soft for a certain period, and they are focused on value shoppers.

On the e-commerce front, DMart Ready, the company’s online grocery delivery service, showed strong growth in key metro cities. Although several pick-up points were closed during the year, the home delivery channel gained significant momentum, compensating for the closures. Management described FY25 as a year of "reset and review," while they remain confident in the scalability and relevance of the DMart Ready model for urban consumers. The profitability of the standalone online segment takes some time.

Stock Reaction

Following the earnings announcement, DMart’s shares were trading lower, reflecting investor caution amid margin pressures despite revenue growth. The stock has delivered mixed returns over recent years, with a 14% decline over the past year.