Mumbai-based grocery chain DMart doubles revenue since pre-pandemic levels, stocks hit Rs 4506

Launched with its first store in Mumbai’s Powai over two decades back, DMart has become one of India’s top grocery chains alongside Reliance Retail. Investor turned entrepreneur Radhakrishna Damani’s retail Behemoth withstood the pandemic, as online sales surged even as stores were shut. It has bounced back stronger with a 36 per cent jump in revenues for its operator Avenue Supermarts at Rs 10,385 in the third quarter of 2022.

Surged a long way past recovery

Forget reaching pre-pandemic levels, DMart’s revenue has doubled in comparison to the quarter before the lockdown struck. The supermarket chain has more than 300 stores across India now, while its rival Big Bazaar suffered losses and was shut down this year. At 55 outlets, a major chunk of DMart’s presence is concentrated in Mumbai, and one in three of its stores are in Maharashtra.

The euphoria around the jump in DMart’s revenue reflected on the indices, with Avenue Supermarts’ shares trading at Rs 4506 on BSE, up almost 2 per cent. For the first quarter, its standalone profit had hit Rs 680 crore, as compared to Rs 115 crore in the same period last year. Research by Report Ocean has found that the grocery market in India is growing at a 61 per cent rate between 2021 and 2027.

Standing strong on low debt, high profit business model

The numbers are also a clear indication that DMart is still dominating the market, despite Swiggy and Blinkit challenging it with 10-minute deliveries. As opposed to startups which are yet to achieve profitability, DMart is one of the most profitable grocery chains in the country.

Among strategies that scripted Damani’s supermarket success story, is paying suppliers upfront instead of buying goods on credit. This allows DMart to offer deep discounts on products in its store, and gain an edge over quick delivery startups. DMart also keeps debt low by owning most of its stores rather than renting facilities, and has also entered the e-commerce space with a strong brick and mortar foundation.