Hit by the coronavirus pandemic, Radhakishan Damani’s Avenue Supermarts today reported a fall of 88% on-year basis in net profits in the first quarter of the current financial year.
Hit by the coronavirus pandemic, Radhakishan Damani’s Avenue Supermarts today reported a fall of 88% on-year basis in net profits in the first quarter of the current financial year. The hypermarket chain had earlier said that business was disrupted with various stores closed in accordance with the lockdown guidelines. “Covid-19 continued to spread across the country. The ensuing restrictions have had a significant impact on our operational and financial performance in the quarter,” the company said in a filing to the stock exchanges. Revenues for Avenue Supermarts fell 32% from the previous year.
Consolidated total revenue for the hypermarket chain stood at Rs 3,933 crore in the June quarter, down from Rs 5,825 crore in the same quarter last year. This aided by the fall in revenue from operations that were hit by the pandemic. In the previous quarter, just as the coronavirus was setting foot in India and the first lockdown was initiated, revenue for the company had surged to Rs 6,255 crore. Total expenses of Avenue Supermarts stood at Rs 3,875 crore taking the profit before tax to just Rs 58.77 crore. Profit before tax stood at Rs 506 crore in the first quarter of the last fiscal year. Net profit tanked to Rs 40 crore, 88% dip from the Rs 323 crore that the retail giant managed to earn last year in the same period.
Neville Noronha, CEO & Managing Director, Avenue Supermarts said that the company was able to pay employees and suppliers along with other service providers just as it used to before. He added that Indian organised retailers did not witness a surge of customers. “This was because of the strong enforcement of store shutdowns, restrictive movement of people in general and strict social distancing rules inside stores. While the overall lockdown rules have softened in general, they continue with the same or more severe intensity in certain cities and local municipalities from time to time,” Neville Noronha said.
The company said that stores that have opened have recovered to 80% or more of pre-Covid sales levels. “Discretionary consumption continues to be under pressure, especially in the Non-FMCG categories. This is impacting gross margins negatively,” the company said. Avenue Supermarts said that the future revenues remain uncertain as store operations and duration of operation per day continues to remain inconsistent across cities due to strict lockdowns.