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Avenue Supermarts is stepping up its investment in online grocery, approving a fresh infusion of up to ₹500 crore into its subsidiary, Avenue E Commerce. The latest commitment takes the company’s total investment in the business to nearly ₹2,000 crore, including ₹350 crore invested during FY26.
The Radhakishan Damani led retailer continues to back DMart Ready despite widening losses. Avenue E Commerce reported a 17 per cent year on year increase in revenue to ₹4,094 crore in FY26, compared with ₹3,502 crore in the previous year. However, its net loss widened to ₹307 crore from ₹247 crore in FY25.
The fresh capital comes as DMart reshapes its online grocery strategy. Rather than competing directly with quick commerce players, the company has narrowed its operations to 11 core cities and is focusing on improving order density, unit economics and digital engagement.
According to HDFC Securities, DMart Ready is currently in a right sizing phase, having reduced its presence from 25 cities in FY25. The company has exited markets where order density was relatively low and is sharpening its focus on customers making larger, planned monthly or fortnightly purchases.
The online platform is also strengthening its proposition through tailored product assortments, six hour slotted deliveries and greater digital engagement. DMart Ready does not intend to directly compete in the quick commerce space, where rapid delivery remains the primary proposition.
The announcement, however, weighed on Avenue Supermarts’ stock, with shares falling as much as 2 per cent to ₹3,880.15 on the BSE.
Brokerages remain divided on the company’s outlook. HDFC Securities has maintained an ADD rating with a target price of ₹4,100, while Emkay Global has retained a SELL rating with a target of ₹3,700. Systematix Institutional Research has maintained a HOLD rating with a target of ₹4,331.
HDFC Securities expects DMart to continue expanding its physical store network at around 15 per cent annually, although the availability of suitable real estate remains a key constraint. The brokerage has lowered its FY28 and FY29 earnings per share estimates by around 4 per cent, factoring in slower same store sales growth and fewer store additions.
Meanwhile, Emkay Global remains cautious, citing increased competition, narrowing differentiation in value and assortment, declining return on invested capital and concerns around the company’s valuation. DMart is targeting around 8 per cent like for like growth in FY27, with growth expected to be driven largely by non metro markets, while mature metro stores continue to face increasing competition.
