Lower finance cost boosts D-Mart Q1 net 48 per cent to Rs 175 crore

Mumbai: Lower interest burden helped Avenue Supermarts, that runs the D-Mart chain of supermarkets, to report a healthy 47.6 per cent jump in net profit for the June quarter at Rs 174.77 crore.

The company, which was not a publicly traded firm in the year-ago period, had a net profit of Rs 118.44 crore. The company hit the markets with a blockbuster initial public offering (IPO) in March which was oversubscribed over 100 times and even a better listing with the stock gaining close 120 percent on debut.

The company raised over over Rs 1,870 crore through the share sale. Its standalone income in the quarter rose to Rs 3,598.13 crore, a growth of 35.7 per cent from Rs 2,652.39 crore a year ago. The company attributed the healthy set of number to lower finance cost.

"Profits are in line with expectation, and was driven mainly by lower interest cost burden owing to the IPO money that came in after the listing in March," Avenue Supermarts chief executive and managing director Neville Noronha told PTI in a post-earnings concall. He said the company has transitioned into the GST regime well with minimal migration challenges.

"While supplies from certain vendors could see some short-term disruptions, we are optimistic that GST will create excellent opportunities for small and medium businesses to become preferred suppliers to organised retail in the near-to long-term."

"We anticipated supply shortages, and built our inventory well ahead to last up to June 30," he said, adding now the focus is on improving efficiencies. The highly successful IPO made made Radhakishan Damani, the founder of the company and a low-profile investor, a part of the country richest 20 club.

The company has a cluster-based approach towards expansion, and is positioned as a value retailer and operates 132 stores across Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya Pradesh, Rajasthan, the Delhi-NCR region and Chhattisgarh.