D-Mart Disappoints Investors with Lower Profit Margins, Due to Increased Discounts and Pressure to Meet Rapid Delivery Demands

DMart, an Indian retail chain, has reported a slip in its profit due to the impact of discounts and rapid deliveries. The company’s profit fell 12.5% year-on-year to ₹1,220 crore (around $170 million) in the fiscal second quarter ended September 30. Sales, however, rose 16.4% to ₹14,356 crore (around $2 billion). The decline in profit was due to higher operating expenses, which increased 22.5% to ₹4,250 crore (around $590 million), mainly driven by discounts and promotions to drive sales growth. Rapid delivery and e-commerce initiatives also added to the costs. The company’s same-store sales growth was robust at 10.4%, driven by strong demand for general merchandise, household, and cosmetics. However, the rapid delivery and e-commerce business, which is still in the early stages, added to the operating expenses. Despite the slip in profit, the company maintained its outlook for the full fiscal year, expecting a single-digit percentage growth in profit.