Nearly three months after stepping up its focus on online grocery, Avenue Supermarts, the parent company of DMart, has approved a fresh investment of up to ₹500 crore in its e-commerce subsidiary Avenue E-Commerce Ltd (AEL), which operates DMart Ready. The investment was approved at the company’s annual general meeting and comes as the online grocery business continues to grow its revenue but remains loss-making. AEL’s revenue increased 17% to ₹4,094 crore in FY26 from ₹3,502 crore in FY25, while its loss widened to ₹307 crore from ₹247 crore.
The fresh capital underscores Avenue Supermarts’ willingness to continue investing in its digital grocery business despite intensifying competition from quick-commerce players. DMart Ready has been recalibrating its strategy, including withdrawing from several smaller cities and concentrating on large metropolitan markets where it sees stronger potential. As of June 30, 2026, the online grocery arm operated in 11 cities after discontinuing operations in seven marginal markets during the quarter.
Avenue Supermarts Approves ₹500 Crore Investment in DMart Ready
Avenue Supermarts has approved an investment of up to ₹500 crore in Avenue E-Commerce Ltd, its wholly owned online grocery subsidiary.
The funding comes at a crucial stage for DMart Ready. While the business is generating substantial revenue, it has yet to achieve profitability, with losses increasing in FY26 despite double-digit revenue growth.
The investment indicates that Avenue Supermarts continues to view online grocery as strategically important to the future of the DMart business.
Key Details
| Parameter | Details |
|---|---|
| Parent company | Avenue Supermarts |
| Retail brand | DMart |
| Online grocery arm | Avenue E-Commerce Ltd |
| Platform | DMart Ready |
| Fresh approved investment | Up to ₹500 crore |
| FY26 revenue | ₹4,094 crore |
| FY25 revenue | ₹3,502 crore |
| FY26 loss | ₹307 crore |
| FY25 loss | ₹247 crore |
| FY26 revenue growth | 17% |
| Current operating cities | 11 |
| Business strategy | Focus on large metro markets |
The investment was approved despite the widening loss, showing that the company is prioritising the development of its online channel even while working to improve its economics.
DMart Ready Revenue Rises 17%
Avenue E-Commerce’s revenue increased to ₹4,094 crore in FY26, up from ₹3,502 crore in FY25.
That represents an increase of ₹592 crore, or roughly 17% year over year. However, the business did not translate this revenue growth into improved profitability.
Instead, its loss expanded to ₹307 crore in FY26 from ₹247 crore a year earlier.
DMart Ready Financial Performance
| Financial Year | Revenue | Loss | Revenue Growth |
|---|---|---|---|
| FY25 | ₹3,502 crore | ₹247 crore | 21% |
| FY26 | ₹4,094 crore | ₹307 crore | 17% |
| Change | +₹592 crore | +₹60 crore | — |
The figures show the central challenge facing Avenue Supermarts: DMart Ready is growing, but the cost of building and operating the online business remains high.
Losses Continue to Widen
The increase in losses is particularly significant because Avenue Supermarts has historically built its reputation around a low-cost retail model.
DMart’s physical stores focus heavily on price competitiveness and operational efficiency. Replicating that model online is more difficult because e-commerce involves additional expenses related to technology, fulfilment, delivery, warehouses and customer acquisition.
Avenue E-Commerce’s loss increased by ₹60 crore between FY25 and FY26.
DMart Ready Loss Trend
| Metric | FY25 | FY26 | Change |
|---|---|---|---|
| Loss | ₹247 crore | ₹307 crore | +₹60 crore |
| Approx. increase | — | — | 24.3% |
The widening loss means the new ₹500 crore investment will likely be important for funding continued operations, technology and expansion while the company works toward better unit economics.
Why DMart Is Still Investing in Online Grocery
The decision to invest more money despite losses reflects the structural change taking place in India’s grocery market.
Consumers increasingly expect retailers to offer both physical and digital shopping options.
DMart’s core business remains dominated by physical stores, but online grocery gives the company another way to reach customers and respond to changing shopping habits.
Avenue Supermarts has previously described DMart Ready as an effort to offer customers the same value proposition through an alternative channel.
The latest investment suggests the company does not want to abandon that strategy even as the economics remain challenging.
DMart Ready Is Changing Its Expansion Strategy
The investment comes shortly after DMart Ready changed its approach to geographic expansion.
Instead of trying to establish a presence across a large number of cities, the online business has been concentrating on markets where it believes it can generate better economics.
During the June quarter, DMart Ready discontinued operations in seven cities that were described as marginal contributors. By June 30, the platform was operating in 11 cities.
DMart Ready’s Geographic Strategy
| Earlier Approach | Current Approach |
|---|---|
| Broader geographic expansion | Greater focus on selected markets |
| Presence in more cities | Concentration on large metros |
| Growth-oriented expansion | Greater focus on operating efficiency |
| Wider footprint | Exit from marginal markets |
The shift indicates that Avenue Supermarts is becoming more selective about where it deploys capital.
Quick Commerce Is Increasing Competitive Pressure
The online grocery market has changed dramatically with the rise of quick-commerce companies.
Blinkit, Zepto and Swiggy Instamart have trained consumers to expect extremely fast deliveries, in some cases within minutes.
DMart Ready has historically followed a different approach, focusing on its value proposition rather than competing directly on ultra-fast delivery.
That model could help control some fulfilment costs, but it also means DMart Ready has to convince customers that lower prices and value can compensate for longer delivery windows.
India’s Online Grocery Competition
| Business Model | Main Selling Point |
|---|---|
| DMart Ready | Value and grocery pricing |
| Blinkit | Rapid delivery |
| Zepto | Rapid delivery |
| Swiggy Instamart | Rapid delivery |
| Traditional supermarkets | Physical shopping and assortment |
| General e-commerce | Wider assortment |
The competitive environment makes the ₹500 crore investment particularly significant because Avenue Supermarts is committing additional capital while avoiding a direct race for the fastest possible delivery.
DMart Ready Is Focusing on Metro Markets
The company has increasingly emphasised large metropolitan markets.
This strategy could improve economics because major cities tend to have higher population density, stronger digital adoption and potentially better order volumes per fulfilment location.
A concentrated network can also allow a retailer to make better use of inventory and delivery infrastructure.
The July strategy shift showed that DMart was willing to discontinue operations in cities that were not making a meaningful contribution rather than continuing to expand purely for geographic reach.
The ₹500 Crore Investment Comes After Earlier Funding
Avenue Supermarts has already invested substantial amounts into its online grocery operation.
In FY25, the company had invested about ₹1,138 crore in its online subsidiary, according to its annual report.
The latest ₹500 crore approval could take cumulative investment in the business to nearly ₹2,000 crore, according to reporting on the latest funding decision.
Investment in Avenue E-Commerce
| Period | Investment/Reported Capital |
|---|---|
| Investment accumulated through FY25 | ~₹1,138 crore |
| Newly approved investment | Up to ₹500 crore |
| Potential cumulative investment | Nearly ₹2,000 crore |
The amount demonstrates how much capital Avenue Supermarts is willing to deploy to establish an online grocery presence.
The Challenge Is Turning Growth Into Profit
The biggest question for DMart Ready is no longer simply whether it can grow revenue.
Its FY26 revenue of ₹4,094 crore demonstrates that the business can generate meaningful online sales.
The bigger challenge is whether it can eventually produce sustainable profits.
The difference between revenue growth and profit growth is particularly important in grocery e-commerce because margins can be thin while fulfilment and delivery costs are substantial.
What DMart Ready Needs to Improve
| Area | Objective |
|---|---|
| Order density | Increase orders per fulfilment location |
| Delivery costs | Improve logistics efficiency |
| Inventory | Reduce wastage and inefficiencies |
| Customer acquisition | Lower acquisition costs |
| Average order value | Increase basket size |
| Gross margins | Improve product economics |
| Geographic focus | Concentrate on profitable markets |
The company’s withdrawal from marginal cities suggests that improving economics is already becoming a priority.
DMart’s Physical Business Remains the Core
Despite the attention surrounding its online grocery investment, Avenue Supermarts remains overwhelmingly a physical retail business.
The company opened three new DMart stores during the June 2026 quarter, taking its store count to 503. Its consolidated revenue for the quarter reached ₹18,795 crore, while profit after tax increased 11.3% year over year.
Avenue Supermarts Q1 FY27
| Metric | Q1 FY27 |
|---|---|
| Total revenue | ₹18,795 crore |
| Revenue growth | 14.9% YoY |
| EBITDA | ₹1,499 crore |
| EBITDA growth | 15.4% YoY |
| EBITDA margin | 8% |
| Store count | 503 |
| PAT growth | 11.3% |
This highlights the difference between the company’s mature physical retail operation and its still-developing online business.
Online Grocery Remains a Small but Growing Channel
Avenue Supermarts’ experience also reflects a broader challenge for Indian retailers.
E-commerce sales have increased in absolute terms, but their contribution to overall retail revenue has not risen dramatically for many established chains.
An Economic Times analysis of major Indian retailers found that the share of e-commerce in overall revenue has generally remained flat or increased only modestly since the pandemic-era surge.
For DMart, however, the continued investment suggests that management sees online grocery as strategically necessary even if the channel takes longer to become profitable.
Why DMart’s Model Is Different From Quick Commerce
DMart’s traditional advantage is its ability to sell products at competitive prices through an efficient retail model.
Quick-commerce companies, by contrast, have historically prioritised speed and convenience, often requiring dense networks of dark stores and delivery infrastructure.
DMart Ready’s approach attempts to preserve the company’s value-focused positioning online.
This means the company does not necessarily need to win the race for the fastest delivery if it can build a compelling combination of price, assortment and reliability.
The New Capital Could Support Technology and Operations
Avenue Supermarts has not indicated that the entire ₹500 crore will be allocated to a single purpose.
However, the additional capital could provide the online subsidiary with resources to invest in technology, fulfilment infrastructure, inventory and operational improvements.
The company can also use the funding to support the transition toward its more focused metropolitan strategy.
The key objective will ultimately be to make the online business more financially sustainable.
Investors Will Watch DMart Ready’s Losses Closely
For shareholders of Avenue Supermarts, the online business represents both an opportunity and a risk.
A successful digital grocery operation could create a valuable second growth engine alongside the company’s physical stores.
But continued losses could put pressure on consolidated profitability if the online business requires increasingly large capital injections.
The latest ₹500 crore approval therefore shows that management is prepared to tolerate near-term losses in pursuit of longer-term strategic value.
The Investment Signals Long-Term Commitment
Avenue Supermarts could have reduced its online ambitions after losses widened.
Instead, it has approved another ₹500 crore.
That suggests management continues to believe that having an online grocery channel is strategically important despite the competitive environment.
The decision to simultaneously narrow the geographic footprint also suggests a more disciplined approach: invest more capital, but concentrate it where the business has a better chance of achieving scale and efficiency.
The Bigger Picture
Avenue Supermarts’ approval of up to ₹500 crore for Avenue E-Commerce highlights the difficult balancing act facing traditional retailers entering India’s online grocery market. DMart Ready generated ₹4,094 crore of revenue in FY26, up 17% from the previous year, but its loss widened to ₹307 crore.
The company is responding by combining fresh capital with a more selective expansion strategy. DMart Ready has exited several marginal cities and is concentrating on large metropolitan markets as competition from quick-commerce companies intensifies. The strategy suggests that Avenue Supermarts is prioritising better economics rather than simply chasing geographic or delivery-speed growth.
Looking Ahead
The next phase of DMart Ready’s development will depend on whether the new capital can help narrow losses while sustaining revenue growth. With the business already generating more than ₹4,000 crore in annual revenue, the focus is likely to shift increasingly toward order economics, fulfilment efficiency, customer retention and profitability. The decision to exit marginal markets could help the company concentrate resources on locations with greater scale potential.
For Avenue Supermarts, the online grocery business remains a long-term strategic bet rather than an immediate profit engine. The ₹500 crore investment shows that DMart is willing to keep funding that bet, but the widening FY26 loss means investors will increasingly look for evidence that the company can turn online scale into sustainable profitability. With India’s grocery market becoming more competitive, DMart Ready’s ability to combine its low-price positioning with a financially viable digital model will be critical to the success of the strategy
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