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Saturday, March 25, 2017

D-Mart Success Mantra

D-Mart making highlights since its IPO in market. D-Mart is in the business of Supermarket. D-Mart was incorporated in 2002 by Radhakrishan Damani. He is also known as Guru of Most famous stock bull Jujhunwala. D-Mart is also known as Avenue Supermarkets limited. It is a Mumbai based company. D-Mart is most profitable among various F&G companies.

Now Let’s Know about the company:-
(i)                It has 112 outlets in India across 41 cities in India.
(ii)              It has distribution and packing centres, Company has 21 distribution centres and 6 Packing centres in Maharashtra, Gujarat , Telangana and  Karnataka.
(iii)            There are following promoters of the company:-
a.       Radhakishan S. Damani;
b.      Gopikishan S. Damani;
c.       Shrikantadevi R. Damani;
d.      Kirandevi G. Damani;
e.       Bright Star;
f.        Royal Palm Trust;
g.       Bottle Palm Trust;
h.      Mountain Glory Trust;
i.         Gulmohar Trust; and
j.         Karnikar Trust
(iv)            Company financials are very sound as company profitability has been increased from 604.06 crore to 3212.07 Crore and Total assets increased from 11908.76 crore to 31001.94 crore also revenue increased from 22224.09 crore to 86061.05 crore in year 2012 to 2016.
(v)              Company IPO price:- 299 Rs/ Share at face value-10 Rs.
(vi)            IPO Subscription:- 104.48 times
Company Share listed at 604.40 Rs/Share i.e. more than double the issue price.
While comparing it with other retail companies for Fiscal year 2016, Kishore Biyani group Future retails has put up profit of 14.55 crore and annual revenue of Rs. 6845 .
For RPG Group owned Spencer’s Retail posted Rs. 168 Crore Loss on revenue of Rs. 1881.31 crore. In Same period D-Mart made profit of Rs. 320 Crore and Revenue of Rs. 8600 Crore.
Reliance Retail much larger retailer and sells everything from electronics to jewellery posted profit of 302 Crore but on back of strong revenue of Rs. 18399 crore. Revenue of Reliance retails are more than double than D-Mart.


Business Model of D-Mart:-
(i)                D-Mart keeps its business Model to Food and groceries while most of other companies has moved to High end electronics, Jewellery and watches. Company has remains intact to its business model. Company has business model very much similar to Walmart.
(ii)              Company also remains away for creating products of their brand, like future retails and Trent. Although it is very lucrative market to get launch own products.
(iii)            Company works on the principle of selling the products at lower than MRP prices. This will in-turn getting great inventory turnover ratio. This high inventory turnover ratio is used to negotiate with wholesalers to get products at lower prices.
(iv)            D-Mart offer products 6% to 12% cheaper than what they will find at other stores. In some cases, certain products will be 10% below MRP.
(v)              D-Mart never open a store in Mall where rentals and cost of acquisition is very high, while other competitors open their stores in malls.
(vi)            D-Mart wasn’t in hurry to do expansion. While other retailers are experimenting of opening over different geographies. D-Mart sticks to what it knows best. It uses one of two formats of stores whose size is calculated based on location and shopper density. The company is also extremely reluctant to expand geographically. Until 2014, it had stores only in four Indian states. Over the last three years, it has expanded into five more states but is still conspicuously absent in the NCR region and other high consumer spending states like Tamil Nadu. Analysts point out that it follows a principle of opening 75% of its new stories in existing states or markets and plans on staying true to this in the coming years.
(vii)           In its 15 years of operations, it has never closed, moved or shut down a store.
(viii)        The company has spent over Rs 23 billion on acquiring land and buildings but either owns most of its stores or has them on a 30-year long-term lease.

(ix)            A recent ‘Yes Securities’ analyst note points out that D-Mart’s rental costs are only 0.2 per cent of total sales compared to 8 per cent for Biyani’s Future Retail.

D-Mart Success Mantra

D-Mart making highlights since its IPO in market. D-Mart is in the business of Supermarket. D-Mart was incorporated in 2002 by Radhakrishan Damani. He is also known as Guru of Most famous stock bull Jujhunwala. D-Mart is also known as Avenue Supermarkets limited. It is a Mumbai based company. D-Mart is most profitable among various F&G companies.

Now Let’s Know about the company:-
(i)                It has 112 outlets in India across 41 cities in India.
(ii)              It has distribution and packing centres, Company has 21 distribution centres and 6 Packing centres in Maharashtra, Gujarat , Telangana and  Karnataka.
(iii)            There are following promoters of the company:-
a.       Radhakishan S. Damani;
b.      Gopikishan S. Damani;
c.       Shrikantadevi R. Damani;
d.      Kirandevi G. Damani;
e.       Bright Star;
f.        Royal Palm Trust;
g.       Bottle Palm Trust;
h.      Mountain Glory Trust;
i.         Gulmohar Trust; and
j.         Karnikar Trust
(iv)            Company financials are very sound as company profitability has been increased from 604.06 crore to 3212.07 Crore and Total assets increased from 11908.76 crore to 31001.94 crore also revenue increased from 22224.09 crore to 86061.05 crore in year 2012 to 2016.
(v)              Company IPO price:- 299 Rs/ Share at face value-10 Rs.
(vi)            IPO Subscription:- 104.48 times
Company Share listed at 604.40 Rs/Share i.e. more than double the issue price.
While comparing it with other retail companies for Fiscal year 2016, Kishore Biyani group Future retails has put up profit of 14.55 crore and annual revenue of Rs. 6845 .
For RPG Group owned Spencer’s Retail posted Rs. 168 Crore Loss on revenue of Rs. 1881.31 crore. In Same period D-Mart made profit of Rs. 320 Crore and Revenue of Rs. 8600 Crore.
Reliance Retail much larger retailer and sells everything from electronics to jewellery posted profit of 302 Crore but on back of strong revenue of Rs. 18399 crore. Revenue of Reliance retails are more than double than D-Mart.


Business Model of D-Mart:-
(i)                D-Mart keeps its business Model to Food and groceries while most of other companies has moved to High end electronics, Jewellery and watches. Company has remains intact to its business model. Company has business model very much similar to Walmart.
(ii)              Company also remains away for creating products of their brand, like future retails and Trent. Although it is very lucrative market to get launch own products.
(iii)            Company works on the principle of selling the products at lower than MRP prices. This will in-turn getting great inventory turnover ratio. This high inventory turnover ratio is used to negotiate with wholesalers to get products at lower prices.
(iv)            D-Mart offer products 6% to 12% cheaper than what they will find at other stores. In some cases, certain products will be 10% below MRP.
(v)              D-Mart never open a store in Mall where rentals and cost of acquisition is very high, while other competitors open their stores in malls.
(vi)            D-Mart wasn’t in hurry to do expansion. While other retailers are experimenting of opening over different geographies. D-Mart sticks to what it knows best. It uses one of two formats of stores whose size is calculated based on location and shopper density. The company is also extremely reluctant to expand geographically. Until 2014, it had stores only in four Indian states. Over the last three years, it has expanded into five more states but is still conspicuously absent in the NCR region and other high consumer spending states like Tamil Nadu. Analysts point out that it follows a principle of opening 75% of its new stories in existing states or markets and plans on staying true to this in the coming years.
(vii)           In its 15 years of operations, it has never closed, moved or shut down a store.
(viii)        The company has spent over Rs 23 billion on acquiring land and buildings but either owns most of its stores or has them on a 30-year long-term lease.

(ix)            A recent ‘Yes Securities’ analyst note points out that D-Mart’s rental costs are only 0.2 per cent of total sales compared to 8 per cent for Biyani’s Future Retail.