Buy Avenue Supermarts Ltd For Target Rs. 4,450 by Motilal Oswal Financial Services Ltd
4QFY25 pre-quarter update
Slightly weaker revenue growth of ~17% YoY (on high base); store additions accelerate
* DMART’s 4QFY25 standalone revenue at INR145b grew 16.7% YoY (vs. our estimate of ~20%), driven by 14% YoY store addition and likely mid- to highsingle-digit SSSG. After a pickup to 17.5% YoY in 3Q, revenue growth moderated in 4Q, albeit on a high base of 20% in 4QFY24.
* However, store additions accelerated, with 28 stores opened during the quarter (vs. 22 stores opened in 9MFY25), taking the total count to 415 stores. We note that most of the store openings were back-ended and the full impact should be visible in the coming quarters.
* Productivity in 4QFY25 impacted by back-ended store additions:
* Annualized revenue per store grew ~3% YoY to INR1.44b (vs. 4% YoY growth in 3Q).
* Annualized revenue/sqft. (calculated) was up ~3% YoY on our estimate to INR34.8k/sqft (vs. 3.5% YoY growth in 3Q).
FY25 performance: 17% YoY revenue growth driven by ~14% store additions
* DMart’s FY25 standalone revenue at INR578b grew ~17% YoY (vs. ~18% YoY in FY24), driven by 14% YoY store addition and likely slight moderation in SSSG.
* FY25 revenue per store grew 3% YoY to INR1.48b and our estimated revenue per sqft also improved 3% YoY to INR35.8k/sqft.
* DMART ramped up store additions in 4Q to end FY25 with 50 store additions (vs. ~40 in FY23-24). A further ramp-up in store additions and a scale-up of online (DMart Ready) business remain the key growth drivers for DMart amid rising competition from quick commerce.
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