ICICI Direct: Testing Times Ahead For DMart; Proven Business Model To Withstand Storm
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ICICI Direct Report
As anticipated, Q1FY21 was a challenging quarter for DMart with store closures and restrictions on sale of GM and apparel impacting quarterly numbers. The management in its previous commentary had highlighted significant fall in revenue in April (down ~45% year-on-year) owing to stringent lockdown measures. Post relaxations in certain states, a gradual recovery was visible (implied de-growth of ~27% YoY in May-June).
DMart added two stores in the quarter taking total store count to 216. The average size of the store opened in the quarter (~1 lakh square feet) was more than 2 times higher than the historical average store sizes (approximately 45,000-50,000 sq ft).
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