Avenue Supermarts Ltd

- 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.

- 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.

- 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).

- 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).

- 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.