New Delhi: Avenue Supermarts, which owns and operates the retail chain DMart, has raced past bluechips like Maruti Suzuki, Larsen and Toubro (L&T), UltraTech Cement and ONGC in terms of market capitalisation.
The Radhakishan Damani-promoted company brags a market cap of over Rs 2.17 lakh crore, making it the 17th most valued company in India after Axis Bank.
Listed in March 2017, the counter has delivered over 1,000 per cent return from its issue price in just four years. DMart shares were issued in the price band of Rs 295-299. At the time of listing, the market cap of the company was less than Rs 40,000 crore.
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The scrip listed at Rs 604, doubling investors wealth from the issue price on Day 1 itself. The counter has gained 21 per cent in 2021 so far.
Damani’s wealth has crossed the $18 billion mark, making him the sixth richest Indian. His wealth has increased by $3.1 billion since January 1, 2021. The rally in DMart’s shares has been the largest contributor to the Dalal Street veteran’s net worth.
What has worked for DMart?
DMart’s strategy focuses on sourcing goods at competitive prices using operational and distribution efficiencies. The company provides decent discounts throughout the year, giving it an edge above its peers.
The focus of DMart shifted to e-commerce business amid the lockdown and pandemic-related curbs.
The company’s business was hard hit by Covid-19 outbreak as most large-format stores were shut for months, impacting sales. However, the revenue from non-FMCG sales went up by 18 per cent in March 2021 quarter.
Financial Performance
Avenue Supermarts reported a 52.76 per cent year-on-year jump in consolidated net profit at Rs 414 crore for March quarter. The chain of hypermarkets had reported a net profit of Rs 271 crore in the corresponding quarter of last year.
Its consolidated total revenue for the quarter rose to Rs 7,412 crore compared with Rs 6,256 crore in the year-ago quarter. Ebitda for the quarter came in at Rs 613 crore against Rs 417 crore in the same quarter last year.
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