Any current/future new fundraising through debt or equity?

No indication of any current or future fundraising through debt or equity was mentioned in the call. Neville Noronha emphasized that the company is fairly well capitalized, especially after the January fundraise. They are focused on accelerating store acquisitions using existing capital and are confident in their financial position. There was no discussion or plan revealed about raising additional capital or altering the capital structure. The company prefers to continue with its current business strategy and capital deployment without distraction from fundraising. Overall, the view is to use

Any current/future capex/capital investment/strategic investment?

DMart is currently in an incubation period for "DMart Ready" stores; capex is mainly for leased stores involving small civil works, lighting, and air conditioning, with a 20%-25% higher per square foot cost than regular DMart stores. The company is accelerating real estate acquisitions for new stores despite the pandemic-related delays in construction; store additions are continuing with a focus on prime real estate. Larger stores are favored because incremental construction cost is proportionally lower and provide longer-term revenue growth opportunities. Supply chain investment is ongo

Future growth expectations in sales/revenue/volumes?

DMart Ready demand has increased 5x in 12 months, indicating strong growth potential, though current revenue growth is about 2.5x (Page 49). The e-commerce segment, particularly DMart Ready, is expanding cautiously with multi-city plans underway but details to be shared later (Pages 42, 49). Store expansion will be muted in FY2021 due to COVID-19 and monsoon impacts but expected to rebound with approximately 40 store openings annually in coming years (Page 7). Larger stores enable higher margins and better general merchandise assortment but incur higher initial costs (Pages 4, 7). Futu

Future growth expectations in earnings/operating earnings/profits/EPS?

Store expansion will continue but at a muted pace in the near term due to COVID-19 disruptions, with a catch-up expected in following years (Page 7, 3). Larger stores provide higher-margin product sales and better long-term ROIC, though initial years may not show strong benefits (Page 7). Operating leverage from distribution centers will come in slowly as warehouses are built for 3-5 years ahead, with gradual capacity additions (Page 46). Cost reductions from green energy and other initiatives may yield few basis points of improvement; employee costs remain a significant expense subject to wag

Current/ Expected Orderbook/ Pending Orders?

The management did not disclose specific numbers regarding current or expected orderbook/pending orders for DMart Ready. (Page 50) Neville Noronha mentioned he cannot comment on the number of daily orders DMart Ready is handling at the moment. (Page 50) Demand for DMart Ready is indicated to be about 5 times the current supply capacity, implying significant latent demand, though exact orderbook or pending order figures were not shared. (Pages 37, 49) Around 220 DMart Ready stores operate in the Mumbai Metropolitan Region, aiming to scale further to meet demand. (Page 16) No explicit details on

Avenue Super.Q1 FY21Retailing

Avenue Super. Q1 FY21 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3,688P/E: 78.7Market Cap: ₹2.4L CrSector: Retailing

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

DMart Ready demand has increased 5x in 12 months, indicating strong growth potential, though current revenue growth is about 2.5x (Page 49).
The e-commerce segment, particularly DMart Ready, is expanding cautiously with multi-city plans underway but details to be shared later (Pages 42, 49).
Store expansion will be muted in FY2021 due to COVID-19 and monsoon impacts but expected to rebound with approximately 40 store openings annually in coming years (Page 7).
Larger stores enable higher margins and better general merchandise assortment but incur higher initial costs (Pages 4, 7).
Future revenue growth is expected mainly from same-store sales growth driven by ticket size and frequency improvements, and selective category expansion with focus on relevance (Pages 44, 47, 38).
The company intends to maintain a gross margin around 15%-16% with aggressive pricing as a moat for sustainable growth (Page 34).

Margin guidance

Category 3

Store expansion will continue but at a muted pace in the near term due to COVID-19 disruptions, with a catch-up expected in following years (Page 7, 3).
Larger stores provide higher-margin product sales and better long-term ROIC, though initial years may not show strong benefits (Page 7).
Operating leverage from distribution centers will come in slowly as warehouses are built for 3-5 years ahead, with gradual capacity additions (Page 46).
Cost reductions from green energy and other initiatives may yield few basis points of improvement; employee costs remain a significant expense subject to wage rises (Page 46).
Gross margin targeted around 15%-16%, with aggressive pricing to maintain competitiveness and long-term moat despite category or SKU changes (Pages 34, 44).
E-commerce growth is noted but currently not a significant EBITDA contributor; brick-and-mortar remains core focus (Pages 7, 33).
Overall confidence in the model with steady double-digit like-for-like growth in revenue per square feet (Page 3).

See what Avenue Super. management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

No indication of any current or future fundraising through debt or equity was mentioned in the call.
Neville Noronha emphasized that the company is fairly well capitalized, especially after the January fundraise.
They are focused on accelerating store acquisitions using existing capital and are confident in their financial position.
There was no discussion or plan revealed about raising additional capital or altering the capital structure.
The company prefers to continue with its current business strategy and capital deployment without distraction from fundraising.
Overall, the view is to use internal resources efficiently rather than seek new debt or equity funding in the near term.

Order book

The management did not disclose specific numbers regarding current or expected orderbook/pending orders for DMart Ready. (Page 50)
Neville Noronha mentioned he cannot comment on the number of daily orders DMart Ready is handling at the moment. (Page 50)
Demand for DMart Ready is indicated to be about 5 times the current supply capacity, implying significant latent demand, though exact orderbook or pending order figures were not shared. (Pages 37, 49)
Around 220 DMart Ready stores operate in the Mumbai Metropolitan Region, aiming to scale further to meet demand. (Page 16)
No explicit details on backlog or pending order values were provided during the call.

See what Avenue Super. management said on order book — free account, 30 seconds.

Capex plans

Yes

DMart is currently in an incubation period for "DMart Ready" stores; capex is mainly for leased stores involving small civil works, lighting, and air conditioning, with a 20%-25% higher per square foot cost than regular DMart stores.
The company is accelerating real estate acquisitions for new stores despite the pandemic-related delays in construction; store additions are continuing with a focus on prime real estate.
Larger stores are favored because incremental construction cost is proportionally lower and provide longer-term revenue growth opportunities.
Supply chain investment is ongoing, focusing on warehouses and logistics designed for evolving store formats, with cost savings expected in basis points.
The company postpones cash and carry and focuses on brick-and-mortar expansion and possible e-commerce opportunities.
Operating leverage from distribution centers and warehouses will build slowly over 10-15 years due to incremental capacity expansion.
Capex on new stores post-COVID is influenced by prime location requirements; real estate prices are softer but deals are progressing faster.

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Margin guidance

Category 3

Store expansion will continue but at a muted pace in the near term due to COVID-19 disruptions, with a catch-up expected in following years (Page 7, 3).
Larger stores provide higher-margin product sales and better long-term ROIC, though initial years may not show strong benefits (Page 7).
Operating leverage from distribution centers will come in slowly as warehouses are built for 3-5 years ahead, with gradual capacity additions (Page 46).
Cost reductions from green energy and other initiatives may yield few basis points of improvement; employee costs remain a significant expense subject to wage rises (Page 46).
Gross margin targeted around 15%-16%, with aggressive pricing to maintain competitiveness and long-term moat despite category or SKU changes (Pages 34, 44).
E-commerce growth is noted but currently not a significant EBITDA contributor; brick-and-mortar remains core focus (Pages 7, 33).
Overall confidence in the model with steady double-digit like-for-like growth in revenue per square feet (Page 3).

Order book

The management did not disclose specific numbers regarding current or expected orderbook/pending orders for DMart Ready. (Page 50)
Neville Noronha mentioned he cannot comment on the number of daily orders DMart Ready is handling at the moment. (Page 50)
Demand for DMart Ready is indicated to be about 5 times the current supply capacity, implying significant latent demand, though exact orderbook or pending order figures were not shared. (Pages 37, 49)
Around 220 DMart Ready stores operate in the Mumbai Metropolitan Region, aiming to scale further to meet demand. (Page 16)
No explicit details on backlog or pending order values were provided during the call.

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Avenue Super. Q1 FY21 Earnings Call Analysis

Revenue guidance

Fundraise plans

Capex plans

Margin guidance

Order book

How does Avenue Super. rank in Retailing?

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What Avenue Super.'s management said in earlier quarters

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