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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Aggressive expansion by India’s largest grocery retailer has not managed to boost growth. Should investors temper expectations?
A popular business channel reported on Wednesday, around noon, that Avenue Supermarts would continue store expansion by 10-15% annually. This immediately set off a sharp uptick in the stock, helping it eventually close 7.1% higher on the BSE. The stock is now up 19.4% year-to-date.
When, later in the day, the detailed analyst call recordings became public, the DMart supermarket chain operator’s ambitions were in line with the earlier newsbreak. “The only thing I could have done better is probably accelerate store expansion more,” outgoing CEO Neville Noronha said when asked what he would have done differently during his tenure. …
The retailer has shrunk operations to fix its loss-making vertical. But a reduced presence risks hurting volumes in a segment dominated by Blinkit and Instamart.
Surprisingly strong metrics alongside aggressive expansion mask a lurking balance-sheet risk. Moreover, competition is not going to be kind to the retail giant any time soon.
Slowing growth, weakening store metrics and a puzzling fundraise point to the retailer losing some of its post-Zudio sheen.
