Ignatius Navil Noronha, the chief executive officer of Avenue Supermarts Ltd, which operates DMart retail stores, has seen his fortune surge to more than a billion dollars as the shares of the retail business jumped an extraordinary 113% this year.
The stock hit a new record high of ₹5,899 on BSE and grew as much as 10.7% in intraday with its market cap rising past ₹3.54 trillion. At 10 am, the scrip was up 2% to ₹5,431 a share. The stock trading higher for seven continuous sessions and advanced almost 40% in this period.
With this, Navil Noronha, the CEO of D’Mart, has become India’s richest professional manager at the age of 47 with his net worth surging past ₹7,744 crores. Currently, Noronha has 13.13 million shares, or 2.03% stake, in the firm.
Naronha achieved this wealth thanks to the 19-fold growth in the share price of Avenue Supermarts. The stock was listed on 21 March 2017 with an issue price of ₹299 a share. Since then, the scrip rose over 1,800% from its issue price.
Born and brought up in Mumbai, Noronha finished his management degree from the Narsee Monjee Institute of Management Studies. Before entering Dmart, Noronha was working with fast-moving consumer goods giant Hindustan Unilever. Avenue Supermarts founder Radhakishnan Damani appointed him in 2004 as the head of the business. He took over as a CEO position in 2007, almost 14 years ago.
DMart maintains to offer the biggest discount across most categories, in turn gaining loyalty, a key factor for managing footfall. The business targets lower-middle, middle, and aspiring upper-middle-income consumers for whom value for money plays a significant role.
The business faces the risk of greater competition from JioMart, Flipkart and Amazon. Still, analysts believe the firm is well situated in the domestic retail industry given its strong execution capabilities, disciplined low prices and low costs strategy, more economical cost of operation, and a smooth distribution network, which help DMart to enter new markets.
Analysts expect a healthy recovery for retail firms pushed by the progressive lifting of lockdown limitation following the adverse second covid wave, aggressive vaccination drive across the country, longer store operating timings, phased resuming of modern trade and festive season-led buying, which are heading to higher footfall.
On Saturday, the firm summarised earnings that were better than expected. Revenues grew by 46.6% year on year. Gross margins increased by 25 basis points y-o-y to 14.3%. Ebitda grew by 106.3% to ₹670 crore. Margins expanded by 260bps to 8.8% aided by lower other expenses (230bps). PAT grew by 113.2%.
After widely covering MMR and foraying into Ahmedabad, Pune, Bengaluru, and Hyderabad, DMart ready has done a soft launch in the cities of Surat and Vadodara. DMart Ready has extended its offering from food and grocery to General merchandise and even fresh fruits and vegetables.
The company added eight new stores in the second quarter, taking the total store count to 246 at the end of September 2021.
“We expect strong momentum to continue in the third quarter led by gains from higher footfall given reduction in covid restrictions, rising consumer confidence due to vaccinations, higher-value sales due to inflation in FMCG and general merchandise, upcoming festival season and more locations and product offerings in DMart Ready,” said Prabhudas Lilladher in a note to its investors.