DMart shares fall 2.3% in trade as Avenue Supermarts Q1FY24 earnings disappoint; should you buy, sell or hold? DMart’s share price tanked 2.3% in trade on Monday mornings as the street factored Avenue Supermarts’ disappointing quarterly earnings. The stock price tumbled to Rs 3,750.05 apiece from Friday’s closing. The hypermarket operator reported a 2.3% rise in its net profit for the first quarter, at Rs 695.36 crore. In the corresponding period last financial year, the net profit stood at Rs 642.89 crore. DMart’s Q1FY24 revenue from operations rose by 18.2% to reach Rs 11,865.44 crore, surpassing last year’s Rs 10,038.07 crore. The company’s total income during the period totalled Rs 11,904.18 crore, while Q1FY24 expenses stood at Rs 11,006.92 crore, clocking a 19.7% increase on-year. “1QFY24 result was below consensus expectations, which was not a surprise. Revenue growth of 18% on-year (vs 12% retail area expansion) is un-exciting. Under-recovery in general merchandise and apparel (still below pre-pandemic levels) continues to be a drag on gross margins (decline of 125 bps YoY). We reckon DMart is a platform business and the downside of this underperformance (in apparels) is limited while all other strengths of the company remain intact. HOLD,” said ICICI Securities.
The launched works involve rehabilitating the Galgamuwa Railway Station and upgrading the railway line from Maho to Anuradhapura, including additional tasks. Another project is the second phase of track rehabilitation from Maho to Omanthai (128 kms), funded by a $318 million Indian Line of Credit.
Transport Minister Gunawardena praised the efforts of Indian company IRCON in Sri Lanka and called for more cooperation in the railway sector. State Minister Shantha Bandara and officials from the Sri Lankan Ministry of Transport attended the event.
Railways is a priority for Indian assistance in Sri Lanka, with over $1 billion invested under five Indian Lines of Credit. IRCON has been involved in Sri Lanks since 2009. It has contributed to the modernisation of Sri Lanka Railways by reconstructing the entire railway line network in the Northern Province (253 Km) and upgradation of the Southern line (115 km), as well as improving safety through advanced signalling and telecommunication systems.
Despite Sri Lanka’s debt standstill in April 2022, India’s support under various Lines of Credit has continued.
(With PTI inputs)