At a Glance:Avenue Supermarts (DMart) has scaled revenue from ₹30,976 Cr in FY22 to ₹59,358 Cr in FY25 — nearly doubling in 3 years. But margins have flatlined, the P/E remains nosebleed-high at 97x, and capex is on steroids. Is this the cost of domination or a bubble in aisle 3?
1. 🛒 Business Overview: The House That Radhakishan Damani Built
- Avenue Supermarts operatesDMart, a pan-India value retail chain focused onlow-margin, high-volumegrocery-led sales.
- Product mix:
- Food & FMCG: >50% of sales
- General Merchandise & Apparel: High-margin, low-contribution (and under pressure)
- Model: Buy land, own stores, avoid rental costs → superior unit economics
- Strategy: “Everyday Low Cost, Everyday Low Price” — aka, desi Costco with less kharcha and no membership cards
2. 💸 FY25 Snapshot: Big
Numbers, Tight Margins
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹42,840 Cr | ₹50,789 Cr | ₹59,358 Cr |
| Net Profit | ₹2,378 Cr | ₹2,536 Cr | ₹2,707 Cr |
| OPM (%) | 8% | 8% | 8% |
| ROCE | 20% | 19% | 18% |
| EPS (₹) | 36.69 | 38.97 | 41.61 |
- Sales CAGR (3Y): 24% | Profit CAGR: 15%
- Margin and return metrics areplateauing, not improving
3. 🏗️ Capex Expansion: Growth at What Cost?
- Fixed Assets: ₹9,260 Cr (FY22) → ₹16,206 Cr (FY25)
- Borrowings up from ₹647 Cr to ₹820 Cr
- Operating Cash Flow (FY25): ₹2,463 Cr — butcapex = ₹2,185 Cr, so FCF nearly zero
- DMart is playing the long game, but the cost is visible on the balance sheet
4. 🏬 Store Network: Bigger, Not Always Better
- Store count as of May 2025:420
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