While DMart founder Radhakrishna Damani's peers chased growth, he focused on cash flow and profitability. And that strategy has made him the most valued retailer in India
The modern retail industry has seen umpteen experiments over the last decade. Most have failed. Even the retail king, Kishore Biyani of Future Group, has admitted to making several mistakes, especially his aggressive expansion, for which he had to sell his most profitable retail venture, Pantaloons, to the Aditya Birla Group. Similarly, Mukesh Ambani has made innumerable tweaks to Reliance Retail’s business model, and still continues to do so.
Amid this action, and confusion, one man, stock market investor Radhakrishna Damani — mostly unnoticed — went about making some of the most astute moves in business with his food and grocery retail company, Avenue Supermarts, better known as DMart. The result was that unlike peers, DMart became profitable within the first three years of starting operations in 2002. It is, in fact, the most profitable Indian retail company. Its revenue has risen over 40 per cent since 2011/12 to ₹8,800 crore, while net profit has risen over 50 per cent to ₹387.5 crore. This when its peers were bleeding and neck deep in debt.
The company, and its investors, have been handsomely rewarded for this feat. The stock made a stellar debut in March, rising 114 per cent over the issue price of ₹229 on the first day. The market valued the company at ₹40,000 crore; all other retail companies put together are valued at ₹20,000 crore. So, what has Damani done differently than the rest? Several things, it turns out.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Pension Scheme - Safety Net
The move to introduce the UPS has evoked mixed reactions. Analysts believe its funding will have limited impact on the fiscal math
The Reit Choice?
Real Estate Investment Trusts (Reits) Are Gaining Traction As Interest Rates Stabilise. But Returns Could Be Affected By Adverse Economic Conditions And Market Volatility
CORPORATE - Calling to Account
The sudden exit of Byju's auditor BDO marks the latest in a long series of setbacks for the edtech firm
EMPLOYMENT: Skills Push
The skill development ministry plans to partner with the UGC to improve the employability of undergraduates
Building on a Vision
L&T'S CHAIRMAN EMERITUS A. M. NAIK HAS BUILT A MAMMOTH ENTERPRISE THAT IS BUILDING A NEW INDIA, FROM ITS METRO RAIL SYSTEMS TO THE RAM TEMPLE
"KYS more important than KYC"
Vijay Kedia is a renowned equity investor; the value of his listed portfolio stands at around ₹1,750 crore
ROXX STAR
THE THAR ROXX COMBINES LUXURY WITH PERFORMANCE TO MAKE A STRONG STATEMENT IN THE MID-SIZE SUV SEGMENT
HIT THE GROUND RUNNING
Smartwatches have become indispensable tools for runners, offering real-time insights into pace, distance, heart rate, and more. Here are a few you can consider
TURNING THE TABLES
INDIA'S FURNITURE MARKET IS POISED FOR A GLOBAL TAKE-OFF. ALREADY, A HOST OF GLOBAL BRANDS HAVE MADE THE COUNTRY THEIR HOME, BUT INDIAN COMPANIES ARE NOT TOO FAR BEHIND
THE EVOLUTION OF ATHERA
IDENTIFYING OPPORTUNITIES IN ADVANCE HAS STOOD THIS BENGALURU-BASED VC FUND IN GOOD STEAD. NOW, WITH A HEIGHTENED FOCUS ON TECHNOLOGY, IT WANTS TO SUSTAIN THE SUCCESS