DMART

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 13 (Reuters Breakingviews) - India is piling into consumer giants’ basket of troubles. Unilever ULVR.L and Nestlé NESN.S are losing pricing power in the world’s fifth-largest economy amid growing competition from nimble upstarts. It’s an unwelcome headache for the groups that are trying to revive their more established markets in Europe and the U.S. With no easy fixes, the problem may require expensive remedies.

Consumer titans were once synonymous with boringly predictable earnings. But a recent bout of management churn and intense competition has made them about as predictable as the start-ups they are now battling for market share. Last February, $140 billion Unilever replaced its CEO Hein Schumacher with its finance chief Fernando Fernandez to accelerate its growth plans. It also grappled with rising commodity prices and spun out its ice cream unit at a disappointing valuation.

Nestlé is enduring an even trickier time. The $240 billion Kitkat maker is on its third CEO in less than three years and is dealing with a decline in sales in Europe and the U.S. These factors have weighed on the groups’ share prices which are flat versus the same period last year, underperforming Europe’s Stoxx 600 .STOXX which is up nearly 20% in the same period.

In ordinary times, these groups could rely on their Indian businesses to compensate. Indeed, historically they performed better than their parents’ businesses in developed markets. At its 2016 peak, sales at Nestlé India NEST.NS grew nearly 16%, eight times the pace of the Swiss group’s European business and four times that of its Americas unit. As recently as 2021, Hindustan Unilever HLL.NS was growing turnover at a punchy 18% as Europe and the Americas only managed under 5%.

But those dynamics are changing. During the year ended March 2025 sales at HUL grew just 2% , down from double digits two years earlier. Meanwhile, Nestlé ’s Indian business grew 1% in 2024. That run rate means India can barely contribute much more to these groups' top lines than it currently does - 2% and 11% for Nestlé and Unilever respectively.

More concerning for investors, however, is the effect this is having on these groups' profitability. EBITDA margins of Hindustan Unilever and Nestlé India are off pandemic-era peaks and could remain below those levels at least until 2027, according to forecasts compiled by Visible Alpha.

The bosses of these businesses blame the recent weakness on rising commodity prices and high inflation which, coupled with stagnating incomes in the aftermath of Covid, have diminished Indians’ purchasing power.

The danger for investors is the decline may intensify. Affluent urban Indians are increasingly shopping for essentials on e-commerce platforms Eternal ETEA.NS and Swiggy SWIG.NS, which use a network of mini warehouses to deliver everything from milk to umbrellas in 10 minutes. These apps enable challenger brands like Honasa Consumer’s Mamaearth and Investment Corporation of Dubai-backed snackmaker Slurrp Farm to display their brands alongside legacy names like Sunsilk and KitKat, robbing Unilever and Nestlé of their storied distribution edge.

Big groups also missed the boat on premiumisation. Indian consumers have become aspirational. That’s birthed whole categories from grooming products to pancake mixes that Unilever, Nestlé and their large rivals are struggling to compete in.

Amid these forces, consumer group boardrooms face two unpalatable choices. They can jack up prices to protect margins but are likely to lose market share in the hypercompetitive Indian market. Alternatively, they can sacrifice margins to boost growth but that means fewer spoils to share with investors.

The first option hardly seems feasible as smaller and more agile rivals are only likely to take more market share from larger groups. Meanwhile, demand for private labels is growing which will put even more pressure on pricing. For now, investors may have to accept lower margins as Unilever and Nestlé try to protect their businesses and invest more heavily in new products.

The risks are plain to see in these groups' valuations. HUL now trades at 47 times forward earnings, down from 65 times in 2021 and lagging supermarket chain Avenue Supermarts' AVEU.NS 69 times.

For now, there are no easy fixes. Launching their own quick commerce offerings makes little sense for consumer giants as users of the existing apps are proving increasingly sticky. A less immediate but more effective way to counter the loss of pricing power is to rejig their product mix. HUL and Nestlé will have to ensure their presence across categories and locations so that consumers rising up the value chain choose their brands over upstarts. A bigger investment in agile AI-enabled tracking of sales trends at mom-and-pop retailers could help with that.

Acquiring fast-growing brands is another option. HUL's 2025 purchase of personal care brand Minimalist valued its target at 9 times its trailing sales, on par with its own multiple. But buying one of India's top online platforms is out of the question: Eternal and Swiggy are delivery service-based companies that would be a clunky fit in these sprawling manufacturing businesses.

Businesses may also need to rethink marketing in a country where close to two-thirds of the population is under the age of 35 and shopping choices are increasingly based on influencer recommendations. HUL spent 10% of its revenue on sales and marketing in the year to March 2025, while its personal-care rival Honasa shelled out 57%. If the Unilever unit raised marketing spend by 10%, its EBITDA margin would go down 87 basis points, Breakingviews calculations based on Visible Alpha estimates show.

To be sure, all these options involve squeezing margins in the short term to ensure staying power in a crowded market. For now, consumer giants will have to add India to their growing list of fixer upper projects.

Follow Shritama Bose on LinkedIn and X

(Editing by Aimee Donnellan; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 13 (Reuters Breakingviews) - India is piling into consumer giants’ basket of troubles. Unilever ULVR.L and Nestlé NESN.S are losing pricing power in the world’s fifth-largest economy amid growing competition from nimble upstarts. It’s an unwelcome headache for the groups that are trying to revive their more established markets in Europe and the U.S. With no easy fixes, the problem may require expensive remedies.

Consumer titans were once synonymous with boringly predictable earnings. But a recent bout of management churn and intense competition has made them about as predictable as the start-ups they are now battling for market share. Last February, $140 billion Unilever replaced its CEO Hein Schumacher with its finance chief Fernando Fernandez to accelerate its growth plans. It also grappled with rising commodity prices and spun out its ice cream unit at a disappointing valuation.

Nestlé is enduring an even trickier time. The $240 billion Kitkat maker is on its third CEO in less than three years and is dealing with a decline in sales in Europe and the U.S. These factors have weighed on the groups’ share prices which are flat versus the same period last year, underperforming Europe’s Stoxx 600 .STOXX which is up nearly 20% in the same period.

In ordinary times, these groups could rely on their Indian businesses to compensate. Indeed, historically they performed better than their parents’ businesses in developed markets. At its 2016 peak, sales at Nestlé India NEST.NS grew nearly 16%, eight times the pace of the Swiss group’s European business and four times that of its Americas unit. As recently as 2021, Hindustan Unilever HLL.NS was growing turnover at a punchy 18% as Europe and the Americas only managed under 5%.

But those dynamics are changing. During the year ended March 2025 sales at HUL grew just 2% , down from double digits two years earlier. Meanwhile, Nestlé ’s Indian business grew 1% in 2024. That run rate means India can barely contribute much more to these groups' top lines than it currently does - 2% and 11% for Nestlé and Unilever respectively.

More concerning for investors, however, is the effect this is having on these groups' profitability. EBITDA margins of Hindustan Unilever and Nestlé India are off pandemic-era peaks and could remain below those levels at least until 2027, according to forecasts compiled by Visible Alpha.

The bosses of these businesses blame the recent weakness on rising commodity prices and high inflation which, coupled with stagnating incomes in the aftermath of Covid, have diminished Indians’ purchasing power.

The danger for investors is the decline may intensify. Affluent urban Indians are increasingly shopping for essentials on e-commerce platforms Eternal ETEA.NS and Swiggy SWIG.NS, which use a network of mini warehouses to deliver everything from milk to umbrellas in 10 minutes. These apps enable challenger brands like Honasa Consumer’s Mamaearth and Investment Corporation of Dubai-backed snackmaker Slurrp Farm to display their brands alongside legacy names like Sunsilk and KitKat, robbing Unilever and Nestlé of their storied distribution edge.

Big groups also missed the boat on premiumisation. Indian consumers have become aspirational. That’s birthed whole categories from grooming products to pancake mixes that Unilever, Nestlé and their large rivals are struggling to compete in.

Amid these forces, consumer group boardrooms face two unpalatable choices. They can jack up prices to protect margins but are likely to lose market share in the hypercompetitive Indian market. Alternatively, they can sacrifice margins to boost growth but that means fewer spoils to share with investors.

The first option hardly seems feasible as smaller and more agile rivals are only likely to take more market share from larger groups. Meanwhile, demand for private labels is growing which will put even more pressure on pricing. For now, investors may have to accept lower margins as Unilever and Nestlé try to protect their businesses and invest more heavily in new products.

The risks are plain to see in these groups' valuations. HUL now trades at 47 times forward earnings, down from 65 times in 2021 and lagging supermarket chain Avenue Supermarts' AVEU.NS 69 times.

For now, there are no easy fixes. Launching their own quick commerce offerings makes little sense for consumer giants as users of the existing apps are proving increasingly sticky. A less immediate but more effective way to counter the loss of pricing power is to rejig their product mix. HUL and Nestlé will have to ensure their presence across categories and locations so that consumers rising up the value chain choose their brands over upstarts. A bigger investment in agile AI-enabled tracking of sales trends at mom-and-pop retailers could help with that.

Acquiring fast-growing brands is another option. HUL's 2025 purchase of personal care brand Minimalist valued its target at 9 times its trailing sales, on par with its own multiple. But buying one of India's top online platforms is out of the question: Eternal and Swiggy are delivery service-based companies that would be a clunky fit in these sprawling manufacturing businesses.

Businesses may also need to rethink marketing in a country where close to two-thirds of the population is under the age of 35 and shopping choices are increasingly based on influencer recommendations. HUL spent 10% of its revenue on sales and marketing in the year to March 2025, while its personal-care rival Honasa shelled out 57%. If the Unilever unit raised marketing spend by 10%, its EBITDA margin would go down 87 basis points, Breakingviews calculations based on Visible Alpha estimates show.

To be sure, all these options involve squeezing margins in the short term to ensure staying power in a crowded market. For now, consumer giants will have to add India to their growing list of fixer upper projects.

Follow Shritama Bose on LinkedIn and X

(Editing by Aimee Donnellan; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

Jan 2 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• DEC-QUARTER STANDALONE REVENUE 176.13 BILLION RUPEES

Source text: [ID:]

Further company coverage: AVEU.NS

(([email protected];))

** India's Dmart-parent Avenue Supermarts AVEU.NS rises 1.9% to 3,896.90 rupees after CLSA reiterates "high conviction outperform" rating on stock

** AVEU among CLSA's top picks in large-cap consumer space

** Brokerage says DMart's expansion-led negative free cash flow likely to reverse as store additions normalize, mirroring global peers Walmart WMT.O, Costco COST.O, BIM BIMAS.IS

** CLSA keeps AVEU target price unchanged at 6,300 rupees; sees strong long-term free cash flow potential

** CLSA expects FY25-28 revenue CAGR of ~15-20%, driven by 155-225 new store openings

** CLSA forecasts FY28 EPS at 30.2 rupees vs 16.9 rupees in FY24; PE multiple to ease from 227x to 127x

** AVEU rated "Hold" on average; median PT is 4175 rupees - data compiled by LSEG

** Stock up 9.4% this year

(Reporting by Brijesh Patel in Bengaluru)

(([email protected]; Ph no. +91 9590227221;))

** India's Dmart-parent Avenue Supermarts AVEU.NS drops 2.3% to 3,821.2 rupees - lowest since early April

** AVEU biggest loser on Nifty Next 50 .NN50 index, which is flat

** Ambit Capital ("Sell") cuts PT on AVEU to 3,327 rupees, from 3,633 rupees; cites quick commerce competition and lower output in its smaller town stores

** Adds, overlap in category of goods with quick commerce and QC's improving value proposition to hurt budget retailers

** Brokerage cuts FY27 and FY28 revenue estimates for AVEU by 3%-5%, also reduces FY25-28 growth estimate to 15% from 17% earlier

** AVEU is Ambit's least preferred stock among large-cap consumer firms including Titan TITN.NS and Trent TREN.NS

** AVEU rated "Hold" on average - data compiled by LSEG

** Stock up 7% this year, trails TITN's 18% rise but outperforms TREN

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

** Avenue Supermarts AVEU.NS falls 1.2% to 4,271 rupees

** DMart supermarket chain operator's Q2 consol PAT rises 3.5% y/y; rev up 15.45% y/y

EARNINGS "UNDERWHELMING", MARGINS UNDER PRESSURE

** BofA ("underperform"; PT: 3.925 rupees) says softer like-for-like sales, elevated investments continue to weigh on earnings; calls Q2 earnings "underwhelming"

** HSBC (retains "reduce"; PT: 3,700 rupees) says key concern remains on moderation of like-for-like sales; says operational expenses elevated

** Jefferies (retains "hold"; raises PT to 4,400 rupees from 4,350 rupees) expects stock to stay range-bound until margins improve

** CLSA ("high conviction outperform"; cuts PT to 6,300 rupees from 6,408 rupees) remains "positive" on co, but sees higher near-term costs due to store additions

(Reporting by Komal Salecha)

(([email protected];))

Oct 3 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• AVENUE SUPERMARTS LTD - STANDALONE REVENUE FOR QTRLY ENDED SEPT 30, 2025 AT 162.19 BILLION RUPEES

Source text: ID:nBSE6vv4dC

Further company coverage: AVEU.NS

([email protected])

** UBS hikes Avenue Supermarts AVEU.NS PT to 5,600 rupees from 5,050 rupees, nearly 19% upside to last close; keeps "buy" rating

** DMart supermarket chain operator's stock up 1.4% to 4,784.7 rupees

** Brokerage cites DMart's highest discount among peers at 21%, boosting customer loyalty in middle/lower-middle income segments

** Notes value retail edge in offline stores and online platform DMart Ready after store, channel checks

** DMart opened 130 stores across India in last 3 years; UBS estimates 230-250 new outlets in next three years

** Adds, growth set to accelerate on quick-commerce foray, value retail business model

** AVEU rated "hold" by 28 analysts on avg, median PT 4,040 rupees - data compiled by LSEG

** YTD, stock up 34%

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

July 11 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• Q1 REVENUE GROWTH IMPACT OF ABOUT 100-150 BPS ON HIGH DEFLATION IN MANY STAPLES, NON-FOOD PRODUCTS

Source text: ID:nBSE6rlPT5

Further company coverage: AVEU.NS

(([email protected];;))

** Shares of Avenue Supermarts AVEU.NS down 3.5% to 4240 rupees

** Co, which operates DMart chain of retail stores, posted Q1 rev growth of 16.2%

** Macquarie says Q1 sales growth marginal miss, keeps "underperform" rating

** GS calls sales growth weaker-than-expected and maintains "sell" call

** Adds, believe co will continue to face competitive pressure in large urban markets from quick commerce, likely pick-up in rival Reliance's store additions

** On the flip side, CLSA retains "outperform" citing confidence in "accelerated pace of store additions in FY26"

** On an avg, AVEU rated "hold" - data compiled by LSEG

** YTD stock up 19%

(Reporting by Hritam Mukherjee in Bengaluru)

(([email protected];))

July 2 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• AVENUE SUPERMARTS LTD - Q1 STANDALONE REVENUE AT 159.32 BILLION RUPEES

• AVENUE SUPERMARTS LTD - TOTAL NUMBER OF STORES AS OF JUNE 30, 2025 IS 424

Source text: ID:nNSE9LTHRp

Further company coverage: AVEU.NS

(([email protected];;))

** Shares of Avenue Supermarts AVEU.NS, which operates the DMart chain of retail stores, fall 2.5% to 4,076.90 rupees

** More than 1.6 mln shares of AVEU traded in 21 block deals at 3,952.80-4,152.00 rupees apiece

** Block deals at 0.6%-5.4% discount to previous close of 4,179.10 rupees

** Overall trading volumes at 3.4 mln shares, over 8 times the 30-day average

** AVEU shares up ~14% YTD

(Reporting by Vijay Malkar)

(([email protected];))

May 5 (Reuters) - ** India's DMart AVEU.NS fall 0.5% 4.038 rupees after posting drop in Q4 margins due to increasing competition from quick commerce firms and higher costs

** AVEU, on average, rated 'hold' and mean price target at 4,083.46 - data compiled by LSEG

MARGIN PRESSURE TO SUSTAIN IN FY26

** Goldman Sachs ("sell," PT: 3,400) says gross margin woes due likely to sustain in FY26, with rev growth unlikely to accelerate as food inflation may offset faster store expansion

** BofA ("underperform," PT: 3,725) says short-term and mid-term impact of competition on pricing and gross margins, especially in metro cities, needs to be seen

** J.P.Morgan ("neutral," PT: 4,150) cuts EBITDA estimates by ~2% on lower margin assumptions despite raising revenue estimates

** CLSA ("outperform," PT: 5,549) lowers FY26-27 earnings estimates to reflect higher near-term costs due to faster store additions

($1 = 84.3040 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

April 3 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• Q4 STANDALONE REVENUE AT 144.62 BILLION RUPEES

Source text: ID:nBSE4bPvVx

Further company coverage: AVEU.NS

(([email protected];;))

Feb 28 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• AVENUE SUPERMARTS LTD - GOT TAX DEMAND OF 1.1 MILLION RUPEES AND PENALTY OF 117,460 RUPEES

Source text: ID:nBSE9TLf7c

Further company coverage: AVEU.NS

(([email protected];))

Adds details paragraph 2 onwards

Feb 6 (Reuters) - Indian food and grocery delivery platform Zomato ZOMT.NS said on Thursday it will rename the company to "Eternal" and unveiled a new logo, a move that comes more than two years after it began using the new name internally.

Eternal would comprise its four major businesses - food delivery vertical Zomato, quick-commerce unit Blinkit, live events business District and kitchen supplies unit Hyperpure, the company said.

"We thought of publicly renaming the company when something beyond Zomato became a significant driver of our future," Founder Deepinder Goyal said in a letter to shareholders.

"Today, with Blinkit, I feel we are here," Goyal said.

The move marks a shift for the company, from when investors were skeptical about Zomato's acquisition of Blinkit in mid-2022, to quick commerce-led growth drawing increasing investor interest.

Blinkit as well as early bird Swiggy's SWIG.NS Instamart have driven a shift in the way Indians shop, and forced retailers such as Reliance Industries' RELI.NS JioMart as well as Amazon AMZN.O and Walmart's WMT.N Indian business to launch their own quick-commerce services.

(Reporting by Kashish Tandon in Bengaluru; Editing by Savio D'Souza and Mrigank Dhaniwala)

(([email protected]; 8800437922;))

Jan 22 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• COURT OF COLLECTOR (STAMPS) LEVIED TOTAL DEMAND OF 6.9 MILLION RUPEES

Source text: ID:nBSE3lHkhL

Further company coverage: AVEU.NS

(([email protected];;))

** Shares of DMart stores-operator Avenue Supermarts AVEU.NS fall 3.2% to 3,564.3 rupees

** Co posts ~5% rise in net profit to 7.24 bln rupees ($84 mln); but EBITDA margin contracts to 7.6% from 8.3%

** Systematix Institutional Equities analysts say margins hurt by bigger discounts, rising share of low-margin foods, slow growth in general merchandise and apparel, rising quick commerce competition

** ICICI Securities expects uncertainty and pressure on profitability to persist in the medium term

** At least 10 analysts cut price targets, per LSEG data

** Avg rating of 26 analysts is "hold" rating; median PT is 4,000 rupees -LSEG data

** Stock shed ~13% in 2024

($1 = 86.3000 Indian rupees)

(Reporting by Ashna Teresa Britto in Bengaluru)

(([email protected] ; ( +91 8078332441))

Updates

** Shares of DMart stores operator Avenue Supermarts Ltd AVEU.NS jump 12.1% to 4,045 rupees; best one-day pct gain since April 2017

** AVEU on Thursday said its Q3 standalone rev grew 17.5% to a record 155.65 billion rupees ($1.82 billion)

** Shares fell 30% in the three months ending Dec. 31, their worst ever quarterly fall

** Quick commerce-led concerns on Dmart's revenue/margins got sharply priced in over past 3 months; valuations favorable - Axis Capital

** Impact from quick commerce seems to be lower than previously feared - JP Morgan

** Shares see most active session in 6-1/2 yrs; more than 5.8 mln shares change hands, 7.1x their 30-day avg

** Analysts tracking AVEU rate it "hold" on avg - data compiled by LSEG

** AVEU shares dropped 13% in 2024

($1 = 85.7330 Indian rupees)

(Reporting by Nandan Mandayam and Ashna Britto in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

Jan 2 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• AVENUE SUPERMARTS - STANDALONE REVENUE FOR Q3 FY 2024-25 AT 155.65 BILLION RUPEES

Source text: ID:nBSE2zmtYV

Further company coverage: AVEU.NS

(([email protected];))

Adds analysts comments, details of bids, background on retail chain operators through out

By Nandan Mandayam and Kashish Tandon

Dec 12 (Reuters) - Indian budget retailer Vishal Mega Mart's $943 million IPO was fully subscribed on the second day of bids on Thursday, though a flood of recent offerings dulled retail investors' appetite for a company analysts say is immune to its bigger rivals' problems.

The issue got bids for 1.17 billion shares at the end of the second day of the three-day process, per exchange data, versus the 756.8 million shares on offer from existing shareholder Samayat Services. Vishal Mega Mart is not selling new shares.

The company, which sells clothes for as low as 99 rupees (just over $1) and groceries, is a relatively small player in India's $600 billion grocery and supermarket industry that is led by the likes of Reliance Retail, DMart AVEU.NS and Tata Group's Star Bazaar.

The big players, however, have struggled with high inflation curbing consumer demand and the rise of quick commerce companies as major rivals.

Meanwhile, Vishal Mega Mart, with 70% of its stores in smaller cities where quick commerce is nascent, is relatively insulated, said Narendra Solanki of brokerage Anand Rathi.

"Vishal Mega Mart is a proxy for rising aspirations in India's smaller towns and cities and stands to benefit from such customers upgrading to branded products from unbranded ones."

Still, retail investors were not as hungry for the IPO. The shares allocated to non-institutional investors were subscribed nearly four-fold, but the retail portion was subscribed just over one-fold.

That was due to the high number of offerings this week and Vishal Mega Mart reserving about 35% of shares for retail investors, the high end of the normal 10%-35% band, said Solanki.

The recent IPO offerings include fintech firm MobiKwik's ONEM.NS $67.4 million IPO on Wednesday, which was fully subscribed in just one hour. Retail investors had bid for 65 times the shares on offer, as on the second day of bidding.

India's IPO market has been bustling, with over 300 companies having raised $17.5 billion so far this year, more than double the amount raised last year, LSEG data showed.

Vishal Mega Mart's shares are likely to begin trading on Dec. 18.

($1 = 84.8600 Indian rupees)

(Reporting by Nandan Mandayam, Kashish Tandon and Chris Thomas in Bengaluru, writing by Indranil Sarkar; Editing by Savio D'Souza and Janane Venkatraman)

(([email protected]; 8800437922;))

** D-Mart stores operator Avenue Supermarts AVEU.NS falls as much as 3.7% to 3,676.9 rupees

** Goldman Sachs cuts PT from 4,000 rupees to 3,425 rupees, a 10.3% discount to last close; retains "sell"

** Says D-Mart's key competitive advantage of offering lowest prices for branded FMCG facing increasing pressure due to recent increase in discount by leading quick-commerce players

** Cuts AVEU's FY25 earnings estimates by 4.2% on lower rev growth

** Stock set to snap four straight quarters of gains

** AVEU rated "hold" on avg; median PT is 4,475 rupees, ~17% above current price - LSEG

** Stock last down 1.6%, extending YTD losses to ~8%

(Reporting by Anuran Sadhu in Bengaluru)

(([email protected]; +91 8697274436;))

By Dhwani Pandya and Aditya Kalra

NAVI MUMBAI, India, Oct 30 (Reuters) - Asia's richest man Mukesh Ambani is mimicking the strategy of popular Indian grocery startups to drastically change how his retail empire operates: from home deliveries that can take a day or two, his business is now targeting a 10-30 minute service.

Quick commerce has reshaped how Indians shop as Zomato, SoftBank-backed Swiggy and Zepto now promise deliveries from their neighbourhood warehouses within 10 minutes, even beating Amazon AMZN.O. These multi-billion-dollar quick commerce businesses, though loss-making, have disrupted sales of mom-and-pop stores and supermarkets as people opt for quick deliveries of everything from milk and chocolates to Apple AAPL.O iPhones.

The sector has become too hot, too fast for Ambani's Reliance RELI.NS to ignore, even though experts say its late entry will face challenges including a lack of small-scale warehouses and running the business from supermarkets focused on walk-in customers.

Datum Intelligence estimates quick commerce sales will hit $6 billion this year, up from just $100 million in 2020.

Reliance plans to leverage its 3,000 supermarkets in 1,150 cities for quick deliveries by deploying small teams operating from dedicated kiosks inside, according to three people familiar with its strategy and Reuters' visits to outlets near Mumbai, where the service was launched this month.

The sources provided previously unreported details of order volume targets, delivery plans and links to Reliance Retail's long-awaited IPO.

Reliance's bet is sparked by changing shopping trends. A recent Datum survey of 3,000 Indian quick commerce shoppers showed 36% had reduced shopping at supermarkets and 46% cut back purchases from mom-and-pop stores.

"Reliance is making an entry as quick commerce is already impacting modern retail and will also impact Reliance stores," said Satish Meena, an adviser at Datum.

Reliance is aiming for a 10-30 minute delivery window because it does not believe customers need orders within 10 minutes and the longer timeframe will help ensure the business is sustainable, said the first person.

Ambani wants to ensure quick commerce helps bolster its business ahead of an IPO of Reliance Retail, which was last year valued at $100 billion, has backers including KKR KKR.N, two of the sources said.

Reliance runs the biggest brick-and-mortar retailer in India's $600 billion grocery market, though it still plays catch-up with Amazon in e-commerce.

Reliance did not respond to Reuters' queries.

CHALLENGES

Reliance is betting a wider product portfolio at its supermarkets - some of which stock more than 10,000 items - will help distinguish its offering from smaller rivals, though it has decided not to add any new warehouses, the sources said.

Once expanded nationwide in coming months, Reliance expects quick commerce to help take daily orders on its JioMart app from around 200,000 now to roughly 500,000, said the second person.

Like he did with mobile data offerings, Ambani has a strong reputation of using cutthroat pricing to disrupt businesses he enters. But cracking quick commerce will not be easy.

Rahul Malhotra, a senior analyst at Bernstein, said quick commerce needs neighbourhood warehouses for fast deliveries under 10 minutes, so any large retailer will need to offer superior product selection and cheaper pricing to ensure customers are willing to wait for up to 30 minutes.

A former Reliance executive who declined to be named for fear of reprisal said many stores are multi-storied and items are located far from each other on shelves, making quick packaging difficult, a task further complicated by in-store crowds.

Inside two Reliance stores in Navi Mumbai, Reuters found distinct "Q-Commerce" areas have been created for stocking frequently ordered items such as noodles, dairy products and chocolates. Riders outside waited for app alerts to pick up orders.

Ajit Karande, a Reliance store manager, said an eight-member team had been tasked to "completely focus on quick commerce", adding "we need to bill and pack the items within 10 minutes."

Earlier visits to IPO-bound Swiggy's SWIG.NS Instamart and Zomato's ZOMT.NS Blinkit warehouses by Reuters showed workers there are mandated to pack orders in under two minutes.

'TOP RIDER', 'BOTTOM RIDER'

The rapid quick commerce growth appears to be hitting the supermarket business.

Reliance Retail, which does not break down its grocery, fashion, electronics and telecom revenue, in October reported its first quarterly revenue decline in at least three years - a 1.1% fall in July-September sales to $9 billion.

Zomato's Blinkit sales surged 122% to $730 million in that period and recorded average growth of 103% in the last six quarters, when Reliance Retail's average stood at 13%, Bernstein said. But Reliance has reported profits for years, while Blinkit remains loss-making.

While Reliance has not commented on quick commerce stress, its rival DMart AVEU.NS, which has 377 supermarkets, said this month it can "clearly see the impact of online grocery formats" on its big-city stores but has declined to compete in that area, leading several analysts to downgrade the stock.

Reliance's "Hyperlocal" grocery service has begun in a handful of Navi Mumbai and Bengaluru stores and will next be launched in cities like New Delhi and Chennai, a fourth source said, adding there was a plan to incentivise its delivery drivers with weekly bonuses to boost the business.

The company also plans to rope in quick delivery startup Dunzo, in which it holds a near 26% stake, to further beef up its delivery fleet, said a fifth source. Dunzo declined comment.

To lure customers and trump rivals, Ambani is using free delivery.

In Mumbai, customers can use Reliance's JioMart app to get a 40 rupees ($0.48) can of Coca-Cola delivered free. Rivals impose levies such as "small cart fee" and "high demand surge" of up to 65 rupees on such an order.

At the Reliance store in Belapur near Mumbai, riders are tracked by the minute. A whiteboard inside names "Top Picker" and "Top Rider" to acknowledge efficiency, and "Bottom Picker" and "Bottom Rider" for slow work.

A "customer order has to be delivered in 30 minutes," said Supriya Naik, a JioMart delivery executive.

"I need to run around a lot."

($1 = 84.0610 Indian rupees)

(Reporting by Dhwani Pandya and Aditya Kalra; Additional reporting by Jatindra Dash in Bhubaneshwar; Editing by Jamie Freed)

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** Shares of Avenue Supermarts AVEU.NS fall as much as 9.5% to 4,140 rupees, lowest since March 21

** DMart stores operator's rev growth slows to 4-year low of 14% in Q2, while EBITDA margin contract on higher operating costs

** Systematix Institutional Equities says offline operating rev was subdued; store opening rate remained weak

** Antique Stock Broking says increasing online competition, especially quick commerce, hurt revenue

** Stock cuts YTD gains to 3%

(Reporting by Ashna Teresa Britto in Bengaluru)

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** India's Avenue Supermarts AVEU.NS drops 3%

** Operator of DMart stores posts 14.2% y/y rise in Q2 revenue vs 18.5% rise in Q1

** Rev growth moderation "disappoints" JP Morgan; negative surprise for Morgan Stanley

** Moderation could be on extended rainfall, supply chain disruptions, JPM says, citing own checks

** Macquarie flags slower-than-expected store additions

** Analysts avg rating on AVEU is "hold" -LSEG data

** YTD stock has gained ~18%

(Reporting by Hritam Mukherjee in Bengaluru)

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Oct 3 (Reuters) - Avenue Supermarts Ltd AVEU.NS:

• STANDALONE REVENUE FROM OPERATIONS FOR QUARTER ENDED SEPT 30 STOOD AT 140.5 BILLION RUPEES

Source text for Eikon: ID:nBSE3qbj3t

Further company coverage: AVEU.NS

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** Bernstein starts coverage of supermarkets operator Dmart AVEU.NS, fashion retailer Trent TREN.NS, Jubilant FoodWorks JUBI.NS, Devyani International DEVY.NS with "Outperform"

** Says Dmart has "clear value positioning"; Trent benefiting from private label portfolio

** Dominos India franchisee Jubilant and KFC India operator Devyani to see boost from revival in fast food demand, menu innovation, expansion

** Consumers beyond the top 10% of income pyramid and outside the top 40 cities to boost retail, restaurant sectors: Bernstein

** Brokerage however rates fashion retailer Aditya Birla Fashion & Retail ADIA.NS and McDonald's operator Westlife Foodworld WEST.NS "Underperform"

** Rigid cost structure to weigh on WEST profitability; debt overhang and weak growth in legacy brands to hurt ADIA - brokerage

** Starts Pizza Hut operator Sapphire Foods SAPI.NS with "Marketperform", citing high valuations

** FMCG index .NIFTYFMCG is up 10.14% in 2024, underperforming the 15.3% rise in Nifty 50 .NSEI

** TREN up 6%, DEVY up 1.2% while AVEU is trading 0.2% lower; ADIA, JUBI, WEST, SAPI down 0.3%-1.6% - Exchange data

(Reporting by Bharath Rajeswaran in Bengaluru)

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BENGALURU, July 24 (Reuters) - Indian textiles firm Trident TRIE.NS reported a 21% fall in its first-quarter profit on Wednesday as it struggled to keep a tight lid on expenses amid rising cotton prices.

The company supplies to stores including Shoppers Stop SHOP.NS, DMart AVEU.NS and online retailers Flipkart and Myntra.

Cost of cotton, a key raw material for Trident, has been elevated for more than a year, hurting profits.

Trident reported a consolidated net profit of 737.3 million rupees ($8.8 million) for the quarter ended June 30, compared with 934 million rupees a year earlier.

The company's revenue from operations rose 17% to 17.43 billion rupees during the quarter from a year ago.

However, cost of raw materials rose nearly 18% during the quarter, causing a near 20% surge in total expenses.

This ate into the company's profit.

Trident's core yarn segment, the key revenue contributor, saw a 49% surge in revenue. The smaller paper and chemicals segment saw a near 5% drop in revenue, as paper prices continued to be under pressure due to heavy imports.

Shares of Trident closed 1.3% higher ahead of results.

($1 = 83.6810 Indian rupees)

(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Mrigank Dhaniwala)

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** Shares of India's Avenue Supermarts AVEU.NS rise as much as 4.5% to 5,164 rupees before paring some gains

** Operator of retail chain DMart posted 17.5% rise in Q1 profit over the weekend; shares last up ~1%

** Brokerage Macquarie, which has an "outperform" rating on the co, says Q1 in line

** Pick-up in general merchandise drive belief in DMart's ability to reverse apparel weakness - Macquarie

** Operational metrics improved, Q1FY25 rev/store higher than the same qtr over FY19-24, says Morgan Stanley

** Morgan Stanley rates co "overweight"; avg rating of 23 analysts on the co "hold" - LSEG data

** At least 10 brokerages covering the stock raised PTs on the company after results - LSEG data

** YTD stock had risen 21%

(Reporting by Hritam Mukherjee in Bengaluru)

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BENGALURU, July 13 (Reuters) - India's Avenue Supermarts AVEU.NS, the operator of the DMart retail store chain, posted a 17.5% rise in first-quarter net profit on Saturday.

It reported a consolidated net profit of 7.74 billion Indian rupees ($92.68 million) for the three months ended June 30 versus 6.59 billion a year earlier.

Its revenue grew 18.5% to 140.69 billion rupees.

DMart has more than 350 stores in India. Its supermarkets offer a wide range of items from food to footwear and home appliances.

It competes with Reliance Industries' RELI.NS retail unit, e-commerce companies such as Amazon AMZN.O and many mom-and-pop stores across India.

(Reporting by Ashna Teresa Britto in Bengaluru; editing by Aditya Kalra and Jason Neely)

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