DMart share price drops nearly 4% after Q3FY24 business update; what should you do?
Avenue Supermarts, which operates the retail chain of DMart, is one such stock that has been on a downward spiral over the last two calendar years. The stock dropped nearly 4% to ₹3,940 per share in today's trading session following the company's release of Q3FY24 business update, which came in below analysts' estimates. Also Read: Weak rural demand to dent FMCG sector volumes in Q3FY24, says Nuvama The company on Tuesday reported a 17.18% improvement in its standalone revenue from operations to ₹13,247 crore, driven by 5% growth in revenue per store to ₹1,565 million and 11% store addition.
On a sequential basis, revenue grew 8%, led by 5% growth in revenue per store and merely 1% store addition. The revenue growth was 5% below the projections made by brokerage firm Motilal Oswal. Also Read: HUL signals first steps to regain market share from small players "Revenue per sq.
ft. saw a moderate growth of 4% YoY. In the last three years, it has remained subdued due to the addition of larger stores and weak discretionary spending.
This trend has been gradually reversing for the last 2-3 quarters, which is evident in the reducing gap between revenue per store growth and revenue per sq. ft. growth in the last 3 quarters (revenue per sq.
ft. improved from ₹31,807 in 4QFY23 to ₹35,869 in 2QFY24). However, in 3QFY24, the trend was impacted, with revenue per sq.
ft. growth at 4% being lower than revenue per store growth at 5%," said the brokerage. "While the shift in the festive season was expected to benefit, the industry-wide commentary has indicated a persistent slowdown in the discretionary category in 3QFY24, which may still hurt the non-food category (25–30% of revenue).
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