Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul><li>While the fourth-quarter earnings looked strong, the forecast is for a sharp fall in profitability. </li><li>Analysts have cut earnings estimates after the management said that the sales in April were down 45%.</li><li>The margin may shrink further as the both the demand and supply of non-essentials take a hit while costs rise due to rising safety needs.</li></ul><keyword id="6505089" type="UNKNOWN" weightage="20" keywordseo="Radhakishan-Damani">Radhakishan Damani</keyword> became India's second richest man as his company <keyword id="6410316" type="UNKNOWN" weightage="20" keywordseo="avenue-supermarts">Avenue Supermarts</keyword>, which operates the <keyword id="2407038" type="PERSON" weightage="20" keywordseo="DMart">DMart</keyword> chain of department stores, became the 11th most valuable company in India and the top retail stock in the country. <br /><br />But the COVID-19 crisis may take a lot of that sheen away, at least the management believes so, which is why the stock price fell a sharp 5% on Tuesday (May 26). <br /><br />  <div type="image" title="dmart share price may 26." msid="75991916" hostid="261"></div><br />In the fourth quarter of the last financial year, DMart reported a 26% growth in revenue to ₹6255.93 crore and a 41.6% jump in profit to ₹271.28 crore, both compared to the same time last year. <br /><br />However, the impact of the coronavirus pandemic accounted for less than a half a month⁠— the revenue growth in March was still 11% ⁠— but that was enough to drag the profit below the ₹381 crore in the preceding three months. <br /><br />  <div type="image" title="DMart profits." msid="75991922" hostid="261"></div><br />Since the beginning of the new financial year, the revenue was down by 45% in April and things could get worse. “Significantly large EBITDA declines are to be expected due to lower sales, lower gross margins, higher cost of operations on account of hardship allowance to front line staff during lockdown and higher personal hygiene/store sanitation costs,” said the company.<br /><br />EBITDA stands for earnings before interest, tax, depreciation, and amortisation and it is a metric to measure the strength of a company’s core business.<br /><br />DMart’s biggest pull for the customers are its discounts, especially for daily essentials. Where the company makes money is in the discretionary products like apparel and they aren’t allowed to be sold yet, in most parts of the country where the company operates. <br /><br />With lockdown 4.0, the company has started selling non-essentials in about one in every three of its stores. However, even from a customer’s point of view, the demand for non-essentials is currently only “need based”. <br /><br />Therefore, analysts from Prabhudas Lilladher have cut the FY21 and FY22 earnings per share estimate for DMart by 16.8% and 8.1% respectively. <br /><br />What’s worse for the company, the costs are rising due to rising sanitisation and safety requirements. While it added 18 new stores in the last quarter, new store openings hereon will be affected due as construction activities have come to a halt. <br /><br />See Also:<br /><a href="https://www.businessinsider.in/business/corporates/news/dabur-fourth-quarter-results-and-share-price-chart/articleshow/75991489.cms?upcache=2">Dabur Chyawanprash was in the minds of immunity-seeking Indians amid COVID-19 lockdown⁠— the earnings will show if they bought enough of it</a><br /><br />

DMart’s management painted a scary picture of the next few quarters ⁠— the shares of Radhakishan Damani’s company fell 5%

<ul><li><strong>The average aggregate demand in China was back to 81% of the pre-pandemic normal as of April 24. </strong></li><li><strong>The demand for consumer staples in China is back to the levels seen before COVID-19 brokeout. </strong></li><li><strong>The relative lag is in consumer discretionary, which, on average, is about 64% of the normal level at the end of April.</strong></li></ul>Global investment bank Goldman Sachs said that most of the reforms announced by the Indian government will have an impact in the medium term while the short term may see a "deeper recession". The country's real GDP growth may fall 5% in the current financial year ending March 2020, the report added.<br /><br />The COVID-19 outbreak happened earlier in China and therefore, it has reduced and the economy is reopening earlier than other parts of the world. Therefore, the recovery trends in China could be a good cue for countries, especially emerging markets like India, to estimate what the post-COVID economic trends might be. <br /><br />China’s equity research team of Goldman Sachs put together a tracker that tracks consumer and industrial demand across China, as the official stats come with a few days lag. <br /><br />The tracker revealed steady growth in China’s economy. “if we really look at the most recently updated, the average aggregate demand, the level average to about 81% as of April 24. So that’s our last, the data points updated and this is a versus the bottom in February, which is only around 50%. Back in January we were at about 90%. So the pace of the recovery was quite rapid from February to March in the first month of activity resumption,” said Trina Chen, Co-head at Goldman Sachs China’s equity research.<br /><br />    <div type="Article" hostid="261" msid="75785648" title="Indian firms can now directly list in foreign markets – there are a few more big changes to Companies Act" mstype="2" mssubtype="0"></div><br />Consumer staples and construction are recovering the fastest. “Consumer staples are food-related demand, essentially demand that has little disruptions and recovered very quickly after the disruption in February in China. Construction was quite depressed back in February, but because of government policy push, so, it’s now back to the pre-virus level, even a little bit higher than the pre-virus level,” Chen said.<br /><br />    <div type="Youtube" id="07Hfxy17REU" title="The Daily Check-In: Tracking China’s Economic Recovery" thumbUrl="https://i.ytimg.com/vi/07Hfxy17REU/mqdefault.jpg"></div><br />This will be good news for the likes of consumer products makers like Hindustan Unilever (HUL) and Marico as well as retailers like D-Mart and Reliance Retail to name a few. For Sanjiv Mehta, CEO of Hindustan Unilever, who had <a href="https://www.businessinsider.in/policy/economy/news/hul-ceo-had-hoped-for-a-v-shaped-economic-recovery-from-covid-19-crisis-but-investors-fear-a-lot-worse/articleshow/75547375.cms" data-type="tilCustomLink" target="_blank">expected a V-shaped recovery in April</a>, this data from Goldman Sachs will be vindication. <br /><br /><table style="width: 156pt;"> </colgroup>  <tbody><tr> <td class="xl63" style="height:15.0pt;width:87pt"><strong>Stock</strong></td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 69pt;"><strong>Last 3 months</strong></td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Emami</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-30.77%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Godrej Consumer</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-13.19%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Dabur</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-12.29%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">HUL</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-9.89%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Marico</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">4.73%</td> </tr></tbody></table><br />The relative lag is in consumer discretionary, which, on average, is about 64% of the normal level at the end of April, according to Goldman Sachs. That indicates a relatively slow recovery for car makers like <a href="https://www.businessinsider.in/business/corporates/news/maruti-suzuki-share-price-as-q4-profit-falls-28/articleshow/75715791.cms" data-type="tilCustomLink" target="_blank">Maruti, Tata Motors and M&amp;M</a> who have been struggling with declining sales for over a year now. <br /><br /><table style="width: 138pt;"> </colgroup> <tbody><tr> <td class="xl65" style="height:15.0pt;width:69pt"><strong>Stock</strong></td> <td class="xl65" style="border-left-width: initial; border-left-style: none; width: 69pt;"><strong>Last 3 months</strong></td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Tata Motors</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-50.12%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">M&amp;M</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-27.09%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Maruti Suzuki</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-26.23%</td> </tr></tbody></table><br />However, China hasn’t fully recovered to pre-COVID levels, as some of the businesses aren’t still fully functional like airlines and theatres. Air travel and tourism business continue to remain weak. <br /><br />    <div type="Article" hostid="261" msid="75785709" title="India will reduce the number of central government companies⁠— some of them will get bigger and some will be sold to private players" mstype="2" mssubtype="0"></div><br />Even in India, hospitality majors <a href="https://www.businessinsider.in/business/news/oyo-mahindra-holidays-emirates-and-boeing-agree-people-wont-fly-for-a-while/articleshow/75731204.cms" data-type="tilCustomLink" target="_blank">OYO and Mahindra Holidays have changed their post-COVID strategy</a> on the premise that people are not going to be flying abroad anytime soon. Both companies believe that people will prefer to travel to places that are within driving distances, and not those where they will have to take a flight to, even after the lockdown is lifted. <br /><br /><table style="width: 166pt;"> </colgroup>  <tbody><tr> <td class="xl65" style="height:15.0pt;width:97pt"><strong>Stock</strong></td> <td class="xl65" style="border-left-width: initial; border-left-style: none; width: 69pt;"><strong>Last 3 months</strong></td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">SpiceJet</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-48.85%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Interglobe Aviation</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-31.62%</td> </tr></tbody></table><br />The box office and casino businesses are down due to people avoiding public gatherings. “So these are kind of the differences within the customer discretionary. But, having said that overall we still see a couple of percent improvement, each week sequentially on is probably the most important sector,” said Chen. <br /><br /><table style="width: 154pt;"> </colgroup> <tbody><tr> <td class="xl65" style="height:15.0pt;width:77pt"><strong>Stock</strong></td> <td class="xl65" style="border-left-width: initial; border-left-style: none; width: 77pt;"><strong>Last 3 months</strong></td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Inox</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-59.19%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">PVR</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-58.90%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Delta Corp</td> <td class="xl67" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-22.20%</td> </tr></tbody></table><br />Over the past weeks, India has started to relax the lockdown norms, but epidemiologists and public <a href="https://www.businessinsider.in/india/news/india-will-see-multiple-waves-of-covid-19-infections-every-few-months-but-thats-not-a-reason-to-panic/articleshow/75707889.cms">health experts warn that it could result in another outbreak.</a> <br /><br /><strong>SEE ALSO:<br /></strong><a href="https://www.businessinsider.in/stock-market/news/indigo-spicejet-adani-gmr-gvk-share-price-may-gain-after-civil-aviation-reforms/articleshow/75775888.cms">Indigo and Spicejet get shorter routes, cheaper fuel bills while Adani, GMR, and GVK get more airport projects to bid for</a><br /><br /><a href="https://www.businessinsider.in/india/news/hindalco-jspl-coal-india-companies-that-will-benefit-from-nirmala-sitharamans-reforms/articleshow/75775443.cms">Hindalco, JSPL, Adani, Coal India, and many more stocks that can benefit from India’s sweeping reforms in coal and mineral sector</a><br /><br /><a href="https://www.businessinsider.in/science/space/news/lt-and-godrej-join-like-boeing-and-lockheed-martin-ula-after-biggest-space-reform/articleshow/75778037.cms">"Now, L&amp;T and Godrej can join hands like Boeing and Lockheed Martin’s ULA," says Gateway House scholar cheering India’s 'biggest space reform'</a><br /><br />

Goldman Sachs’s China recovery data can spark hope for HUL and D-Mart, and make Maruti, Tata Motors and IndiGo more anxious

You Searched For "dmart share price" and got 2 results

DMart’s management painted a scary picture of the next few quarters ⁠— the shares of Radhakishan Damani’s company fell 5%

Sanchita Dash

Goldman Sachs’s China recovery data can spark hope for HUL and D-Mart, and make Maruti, Tata Motors and IndiGo more anxious

Sriram

Navdeep

Popular Keywords

Buying Guides