Avenue Supremarts, which owns and operates retail chain D-Mart, reported a 13.7 per cent year-on-year decline in net profit at Rs 1,165 crore for financial year 2020-21, hit by the coronavirus pandemic.
While total revenue declined 3.6 per cent to Rs 23,787 crore, earnings before interest, tax, depreciation and amortisation (EBITDA) also fell 17.9 per cent to Rs 1,742 crore in FY21. EBITDA margin contracted to 7.3 per cent in FY21 as against 8.6 per cent in FY20.
For January-March quarter, the company's net profit zoomed 51.6 per cent to Rs 435 crore, while total revenue also grew 17.9 per cent to Rs 7,303 crore. EBITDA rose 47.6 per cent to Rs 617 crore, while EBITDA margin expanded to 8.4 per cent from 6.7 per cent in March quarter of FY20.
"FY 2021 has been a challenging year for our business. The year began amidst a strict lockdown post the emergence of the coronavirus towards the end of the last financial year. The economy gradually opened post May 2020 and the second half of the year was progressing towards recovery. However, a much stronger second wave of Covid-19 infections hit the country towards the end of FY 2021 and has once again resulted in significant disruption to our business as several cities and towns have announced restrictions," Avenue Supermarts MD and CEO Neville Noronha said.
The company said significant disruptions have been seen from March 2021 onwards in its store operations as restrictions and local level enforcements have become much stricter. "In general, more than 80 per cent of our stores are operating for significantly lower number of hours (not exceeding four hours per day) or are even shut for operations for one to weeks or shut on weekends. These shut downs are having an adverse and severe impact on our revenues."
The company said construction activities were impacted in the first half of the year and it gradually commenced stor construction in second half. It added 22 new stores in FY21, while two stores were converted into fulfilment centres for Avenue E-commerce Ltd.
It said sales from general merchandise and apparel formed 22.90 per cent of its total revenue for FY21 as compared to 27.31 per cent in the previous year, which is a result of consumer preference of need based or essential goods shopping for a significant period during the year, reduced discretionary spending and significant restrictions on selling non-essentials during the early part of the year.
"This has also impacted our margins during the year. However, Q4 margins did indicate revival of discretionary spends not seen in previous 3 quarters," Avenue Supermarts said.
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