DMart Q3 Result Preview: RK Damani-led firm to post numbers tomorrow; here’s what to expect

The Radhakishan Damani-promoted retail chain recently shared its quarterly business update with the stock exchanges, wherein it revealed that its standalone revenue for the quarter came in at Rs 9,065 crore compared with Rs 7,432.69 crore in the same quarter last year, up 22 per cent.

DMart operated 263 stores as of December 31, the company said in a brief filing.

Kotak Institutional Equities (KIE) said the revenue growth was decent but does not seem to include much contribution from the 17 stores added in the third quarter. It is expecting gross margin to improve sequentially due to relatively higher general merchandise sales driven by festive season consumer spending and rising staples product prices.

“Positive operating leverage and gross margin expansion will drive Ebitda margin by 100 bps YoY and 160 bps QoQ,” it said.

This brokerage is expecting a 35.4 per cent year-on-year (YoY) rise in net profit for the quarter at Rs 636.70 crore compared with Rs 470.20 crore in the same quarter last year. Ebitda margin is seen at 10.3 per cent compared with 8.8 per cent in the September quarter and 9.3 per cent in the year-ago quarter.

Another brokerage Prabhudas Lilladher (PL) is expecting adjusted profit to grow 21.9 per cent YoY to Rs 544.60 crore amid increased spending on discretionary and non-essential items. It pegs Ebitda margin at 9.3 per cent in Q3.

“DMart remains a structural story on consumer shift towards organised retail in Food and Grocery. It has a huge runway of growth given current estimated store potential is 5.5 times its current size in existing catchments, consolidated modern trade with three large players and established own store model with tight control on cost,” PL said.

The brokerage noted the scale-up in the online model DMart Ready, with a gradual increase in the area of operations.

“We estimate 48 per cent PAT CAGR over FY21-24 and remain positive for the long term,” it said with a target of Rs 5,359 on the stock.

Ahead of its earnings, the scrip was trading 0.57 per cent higher at Rs 4,732 on Friday.