DMart Faces Challenges Amidst Quick Commerce Competition

DMart is facing significant challenges due to rising competition from quick commerce, leading to a reduction in its operational cities and a decline in key performance metrics. Despite reporting an increase in consolidated net profit and revenue, the company is experiencing slower growth in new stores and a higher net subsidiary loss. This article delves into DMart's current market position, financial performance, and the implications of its strategic decisions in a competitive landscape.

By Narendra Chaudhary Jul 13, 2026, 13:00 IST

DMart's Current Market Position

According to a research report by PL Capital, the increasing competition from quick commerce is expected to hinder growth in the modern trade sector. DMart Ready, the online service of DMart, has withdrawn from 14 cities over the past 15 months, now operating solely in 11 cities with a focus on larger urban areas. The performance metrics for DMart were mostly in line with expectations, showing a decline in sales per store and sales per square foot by 3.7% and 3.0%, respectively. Although the number of bills increased by 13.4% year-on-year, driven by the addition of 58 new stores in the fourth quarter, the average bills per store per day fell by 5.1%. This decline reflects the impact of the rapid store openings on overall store performance, as noted by PL Capital.

The new stores appear to be experiencing a slower ramp-up, with bill value growth lagging behind estimates. In the first quarter, standalone revenue rose approximately 15% year-on-year to Rs 183 billion, primarily due to a 13.4% increase in bill counts, while the average bill value saw a modest rise of 1.5% compared to 2.5% in FY26. The like-for-like growth rate of 5.5% has stabilized following a spike in the fourth quarter, according to Embay Global.

DMart Ready's operations have been further reduced to 11 cities, leading to a lower net subsidiary revenue growth of around 6%. The net subsidiary loss for the first quarter was reported at Rs 753 million, compared to a loss of Rs 569 million in the same period last year. Consequently, shares of Avenue Supermarts, which operates DMart, fell by as much as 4%, trading at Rs 3,930.

In the first quarter of 2026, DMart announced an 11.3% year-on-year increase in consolidated net profit for the June quarter, amounting to Rs 860.6 crore, up from Rs 773 crore in the same quarter last year. Revenue from operations rose by 14.9% year-on-year to Rs 18,794 crore, compared to Rs 16,359 crore in the previous year. Additionally, EBITDA increased by 15.4% year-on-year to Rs 1,499 crore from Rs 1,299 crore in the same quarter last year, with a slight improvement in EBITDA margin, which reached 8% compared to 7.9% a year earlier.