Avenue Supermarts (DMART) Investor update summary

Business performance and product mix

• General merchandise and apparel (GMA) mix stabilized at 22-23%, with no expectation to return to pre-COVID highs of 27-28%.

• Foods, non-food FMCG, and GMA contributed 23%, 57%, and 21% of FY24 revenue, respectively.

• Food segment's share increased due to agri-food inflation, while apparel showed strong recovery and is now the fastest-growing category.

• Apparel improvements driven by leadership changes and focus on basics with fashion relevance.

• Private label growth remains gradual, with focus on value and quality; branded products remain dominant.

Store expansion and strategy

• 41 new stores opened in FY24, with a target range of 40-60 stores per year over the next three years.

• Cluster-based expansion strategy, growing from 55 stores in 2011-12 to 365 stores in 2023-24, with significant presence in Maharashtra, Gujarat, and southern states.

• Store additions are influenced by internal and external factors, including regulatory and real estate challenges.

• 29% of stores are now in towns with populations under 500,000, up from 21% five years ago.

• Larger store formats are favored for future opportunities, but store size remains variable based on available land.

E-commerce and DMart Ready

• DMart Ready expanded from 1 city in 2016-17 to 23 cities by FY24, focusing on large towns.

• Only one new city added in FY24, focusing on consolidation and operational improvements.

• Home delivery is now the preferred model, with 86% of deliveries within 24 hours.

• Pickup points reduced from 573 to 341 to improve operating leverage; area of service remains largely unchanged.

• DMart Ready's EBITDA margin improved but remains negative; further profitability depends on margin profile and assortment.