Detailed Narrative
COVID Impact and Resilient Operations
FY21 was deeply impacted by two COVID waves with like-for-like growth of -13% and EBITDA margin compressing to 7.3% from normalized ~8.5%. Despite this, management executed well on inventory management (no major write-downs) and cost control. Footfalls dropped significantly but average basket value surged as customers bought more per trip, partially offsetting the impact.
E-Commerce Emerged as Strategic Asset
DMart Ready revenues more than doubled, primarily from Mumbai, with customer demand exceeding fulfillment capacity. Two physical stores were converted to e-commerce fulfillment centers as an experiment. Cost control was exemplary - same cost base at significantly lower revenue base, proving operating leverage potential. Management became meaningfully more positive on e-commerce, calling it 'interesting and promising.'
Recovery Visible Where Restrictions Eased
States with earlier relaxation of COVID restrictions showed 2+ year old stores already exceeding FY20 revenue levels by late June 2021. Evening operating hours proved critical - stores open till 8-9 PM recovered much faster than those restricted to 6 PM closure. This gave strong confidence that underlying demand was intact and recovery would be swift once normalcy returned.
Store Expansion Catch-Up Plan
Only 22 stores opened in FY21 due to COVID disruptions, below the planned pace. Management committed to catching up with 59 stores combined for FY21-FY22 (implying ~37 stores for FY22, later actually delivered 50). Store size standardized at ~50,000 sq ft with larger formats working better for the business model.