D-Mart IPO: A sneak peek into financials of Avenue Supermarts' competitors

Aseem Thapliyal        Last Updated: March 21, 2017  | 14:21 IST
D-Mart IPO: A sneak peek into financials of its competitors

Avenue Supermarts, the parent firm of D-Mart, which is among the most profitable food and grocery retail chains in India, listed at a 105 percent premium to its issue price on Tuesday. The stock rose to Rs 615 level, more than 100 percent premium of its issue price of Rs 299 on the BSE.

The company's market capitalisation rose to Rs 36,758 crore on the BSE.

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Here's a look at the financial position of Avenue Supermarts and its competitors.

Reliance Retail

Reliance Retail (formerly Reliance Fresh), a subsidiary of Mukesh Ambani-owned Reliance Industries is the largest player in the sector. It clocked Rs 18,418.36 crore in revenue for fiscal ending 31 March 2016. For the fiscal ending 31 March 2015, it posted Rs 16,169 crore in revenue.

It operates consumer electronic chain Reliance Digital,  supermarket Reliance Smart and leading lifestyle chain Reliance Trends spread across 177 cities among other brands.

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Against a net profit of Rs 272.48 crore for the fiscal ending 31 March 2015, the retail giant posted a net profit of Rs 306.54 crore in the last fiscal. The firm has 3553 stores spread across 13.25 million square feet.  It has presence in 686 cities and employs nearly 73,000 people.

Its basic/diluted earnings per share of face value of Rs  10 each  stood at 0.61 in 2015-16. In 2014-15, the key figure stood at 0.55.  

Future Retail

Kishore Biyani-led Future Retail is a prominent player in the Indian retail sector. The Mumbai-based firm is engaged in the business of selling a range of household and consumer products through departmental store facilities under various formats.

It is a flagship company of Future Group. It has presence in more than 240 cities across the country through over 11 million square feet of retail space.

It operates household essential store Easyday, hypermarket chain Big Bazaar and Food Bazaar among other outlets. In its home business, the company operates Home Town, a one-shop destination for home improvement, and eZone, a consumer durable and electronics chain.

The Company has access to approximately 20 compact hypermarket easyday stores and over 210 supermarket easyday stores. Its retail formats primarily consists of value business and home business.

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Future Retail has about 738 stores spread across 13 million square feet. The firm reported Rs 7,267.6 crore in revenue for the 2015-16 fiscal. For fiscal 2015-16, the earnings before interest, tax, depreciation and amortisation amounted to Rs 85.5 crore. Future Retail reported Rs 14.5 crore in net profit for the period under consideration.

Inventories turnover ratio for the fiscal stood at 2.2. The ratio denotes how many times a firm's inventory is sold and replaced over a period of time. The ratio measures how fast a company is selling inventory.

A low ratio implies weak sales and, therefore, excess inventory. On the other hand, if the ratio is high, it implies either strong sales and/or large discounts. The pace with which a firm can sell inventory is a key measure of its business performance.

Debt to equity ratio stood at 0.6. The ratio is a financial, liquidity ratio that compares a company's total debt to total equity. It shows the percentage of company financing that comes from creditors and investors.

A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders).

Its return on equity (ROE) for the fiscal stood at 0.8 percent. Return on equity or return on capital is the ratio of net income of a business during a year to its stockholders' equity during that year. It is a measure of profitability of stockholders' investments.

The ratio shows net income as percentage of shareholder equity. ROE is an important measure of the profitability of a company. A higher ROE denotes that the company is efficient in generating income on new investment.

Return on capital employed (ROCE) for the period under consideration stood at 1.5 percent. ROCE is the ratio of net operating profit of a company to its capital employed.

It gauges the profitability of a firm by expressing its operating profit as a percentage of its capital employed. Capital employed is the sum of stockholders' equity and long-term finance.

Alternatively, capital employed can be calculated as the difference between total assets and current liabilities. A higher value ROCE indicates that the company generates more earnings per dollar of capital employed. A lower value of ROCE indicates lower profitability.

The firm is listed on both BSE and NSE.

Trent Hypermarkets

Trent Hypermarkets is Tata Group's retail venture with UK's Tesco that operates Star Bazaar hypermarkets. Trent is engaged in the retail sale of readymade garments.

The Company's segments include Retailing and Others. It primarily operates stores across three formats: Westside, Star and Landmark. Westside offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories.

Mumbai-based Trent has about 93 stores. Its EBITDA stood at Rs 147 crore for 2015-16 fiscal. The firm reported Rs 2494.2 crore in revenue for the 2015-16 fiscal.

Profit after tax was reported at Rs 62.9 crore.  Stock turnover or inventories turnover ratio came at 7. Debt to equity ratio came at 0.1. Return on equity  and return on capital employed stood at 4.3 percent and 5 percent, respectively. The firm is listed on both BSE and NSE.

Avenue Supermarts

Led by Radhakishan Damani, Avenue Supermarts-owned D-Mart is among the most profitable food and grocery retail chains in India. The firm clocked a profit of Rs 318.7 crore in fiscal 2016 on a revenue of Rs 8,581 crore. Its profit after tax (PAT) rose 50 per cent year-on-year. Since FY 12, the firm has logged 100 per cent rise in its revenue every two to three years.

The firm has 110 stores spread across 3.3 million square feet. EBITDA came at Rs 663.4 crore. Its stock turnover ratio is among the highest at 12.8.  Debt to equity ratio for the fiscal stood at 0.7. Return on equity and return on capital employed stood at 21 percent and 21.6 percent, respectively.


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