How does DMart make money?

DMart buys groceries, household goods and clothes in bulk, sells them in its own supermarkets at low everyday prices and keeps a thin slice of each sale. In FY26 it kept about Rs 14.30 as gross margin on every Rs 100 of sales and about Rs 4.81 as net profit.

Why is DMart so cheap?

DMart runs an everyday low cost, everyday low price model. It buys in bulk, pays suppliers in about 7 days, mostly builds its stores on land it buys instead of renting, and sells fast so stock does not sit on shelves. The savings on cost are passed on as lower prices.

Yes. Avenue Supermarts, which runs DMart, reported a standalone net profit of Rs 3,224 crore in FY26 on revenue of Rs 66,968 crore. The consolidated profit, which includes the loss-making DMart Ready online business, was Rs 2,970 crore.

Is DMart Ready profitable?

No. Avenue E-Commerce, which runs DMart Ready, had revenue of Rs 4,094 crore in FY26 and a loss of Rs 307 crore. In 2026 it cut its footprint from 18 cities to 11 to focus on making the model work.

How many DMart stores are there?

DMart had 518 stores as of 30 September 2026, with 21.4 million sq ft of retail area. They are spread across 15 states, one union territory and the NCR.

Who is the CEO of DMart?

Anshul Asawa, a former Unilever executive, became CEO on 1 February 2026 and Managing Director on 1 April 2026. He took over from Neville Noronha, who stepped down after 21 years at DMart.

How DMart Makes Money: The Business Model Explained

Q: Does DMart own its stores?

Mostly, yes. At its July 2026 analyst meet, management said 68 of its roughly 500 stores were on long leases. The usual approach is to buy the land and build the store.

The short answer: DMart makes money by buying goods in huge volumes, selling them in its own stores at prices lower than most rivals, and doing it so efficiently that a small margin on every sale adds up to a large profit. In FY26, Avenue Supermarts, the company that runs DMart, sold Rs 66,968 crore of goods and kept Rs 3,224 crore as profit, about Rs 4.81 on every Rs 100 of sales [2][4]. The trick is not high prices. It is low costs, controlled at every step.

Key numbers
Revenue from operations, FY26 (standalone, Apr 2025-Mar 2026)	Rs 66,968 crore, up 15.9% [2]
Net profit, FY26 (standalone)	Rs 3,224 crore, up 10.1% [2]
Gross margin, FY26 (standalone)	14.30% of sales [4]
EBITDA margin, FY26 (standalone)	7.85% [4]
Revenue, Q2 FY27 (Jul-Sep 2026, standalone)	Rs 19,206 crore, up 18.4% [7]
Net profit, Q2 FY27 (standalone)	Rs 804 crore, up 7.6% [7]
Stores	500 on 31 Mar 2026; 518 on 30 Sep 2026 [2][7]
Retail area	20.6 million sq ft (Mar 2026); 21.4 million sq ft (Sep 2026) [2][7]
Revenue per sq ft, FY26	Rs 33,422 a year [1]
Days payable / days inventory, FY26	7.2 days / 33.2 days [4]
Footprint	15 states, 1 union territory and NCR [1]

The model in one line: everyday low cost, everyday low price

DMart calls its strategy EDLC-EDLP: everyday low cost, everyday low price. In the company’s own words, it aims to procure goods at competitive prices and use operational and distribution efficiency to sell at competitive prices [2]. The annual report adds that low prices come from low procurement and running costs, “rather than as special promotion limited to certain products or to a particular day, week” [1].

In simple terms, DMart does not run a big Diwali sale and then raise prices again. It tries to be the cheapest store in town every day. Its stated mission is “to be the lowest priced retailer in the area of operation / city / region” [1].

The annual report puts it plainly: “Value retail is more supply chain than retail” [1]. DMart says it likes “bulk at every step of the process – bulk in procurement, bulk in movement of goods and bulk in buying behaviour of our shoppers”. It wants customers to visit less often but buy “significantly more” each time [1].

Where the money comes from

Almost all of DMart’s money comes from one thing: selling goods in its stores. In FY26, foods (groceries, staples, dairy, snacks, fruit and vegetables) made up 57.90% of revenue. Non-food FMCG (home care, personal care, toiletries) made up 19.82%, and general merchandise and apparel (clothes, crockery, toys, bed and bath, small appliances) made up 22.28% [3].

The stores rang up 39.8 crore bills in FY26, up from 35.3 crore a year earlier [1]. Divide revenue by bills and the average bill works out to roughly Rs 1,680 (our calculation from [1] and [2]).

Here is what happens to every Rs 100 a shopper spent at DMart in FY26, using the company’s standalone numbers [4]:

About Rs 85.70 goes to paying for the goods themselves. That leaves a gross margin of Rs 14.30.
About Rs 2.02 goes to employee salaries and Rs 4.43 to other running costs such as power, upkeep and logistics.
That leaves EBITDA of about Rs 7.85, the profit before depreciation, interest and tax.
After depreciation on stores (about Rs 1.40), a little interest, and tax, about Rs 4.81 is left as net profit.

That is a thin margin. A store selling fashion or electronics would expect a much fatter gross margin. DMart’s CFO Niladri Deb told analysts in July 2026 that “our healthy gross margin is in the range of 14% to 15%, which keeps us very, very competitive, and that’s the moat that we look at” [5]. DMart chooses to earn little per rupee and make it up on volume.

The five levers that keep costs low

1. Buying in bulk and paying suppliers fast

DMart buys in large quantities and moves goods through its own network. As of 31 March 2026, it had 84 distribution centres and 12 packing centres [1]. Its new CEO lists “bulk purchasing via vendor-friendly policies” as one of the foundations of the business [1].

The unusual part is how fast DMart pays. In FY26, its days payable stood at 7.2 days [4]. That means DMart typically settles supplier bills about a week after receiving goods. The CFO described this as “continuing our strategy of paying vendors quickly” [5].

Why does this matter? Brands and distributors value a buyer who pays on time. In return for quick, sure payment and large orders, suppliers can offer a better price. DMart gives up the free credit that many retailers live on, and gets lower purchase prices instead.

2. Owning the store instead of renting it

Most retailers rent their shops. DMart usually buys the land and builds the store itself. CEO Anshul Asawa explained in July 2026: “DMart has always driven the approach of buying the land, building our store, and then driving the business through that” [5].

At that meeting, management said 68 of its roughly 500 stores were on long leases, and 15 of the 85 stores added in FY26 were leased [5]. That implies about 86% of stores were not on lease (our calculation). The annual report names “store ownership” alongside cluster expansion and bulk buying as a foundational strategy [1].

Owning means DMart does not face rent increases or the risk of a landlord asking it to leave. The cost is that each store needs more money upfront and takes longer to open. The CEO said building a store “takes anyway from two to three years’ time” once you count finding clean land, approvals and construction [5]. DMart is becoming more open to long leases where land is hard to buy, such as the NCR [5].

3. A focused, practical range

DMart stocks what a family needs every month: staples, cooking oil, soap, detergent, utensils, basic clothes. Asawa has said, “We are committed to simplicity and will provide products that resonate with our customers” [1]. It does not try to launch new brands. “We are not necessarily the place where a completely new brand will get launched,” he told analysts, but once a brand gains traction elsewhere, DMart can bring it in quickly [5].

On its own brands, DMart follows what it calls a 20-20-20 rule. An in-house FMCG product should be at least 20% cheaper than the benchmark brand, earn at least 20% more margin, and be able to win at least 20% volume share [5].

4. Stock that moves fast

A grocer with a thin margin must sell its stock quickly. DMart’s inventory turned over 12.8 times in FY26, by the company’s measure of revenue divided by average inventory [4]. In days, it held about 33.2 days of stock [4]. Fast-moving shelves mean less money locked up and less waste.

5. Cluster expansion

DMart does not plant stores randomly across India. It fills one region before moving to the next, so trucks travel short distances from nearby warehouses. At March 2026, it had 128 stores in Maharashtra, 75 in Gujarat, 50 in Karnataka, 48 in Telangana and 47 in Andhra Pradesh, and only one or a few in newer states such as Odisha, Goa and Uttarakhand [1].

The company entered five new states in FY26 and plans to build density there next [5]. Internally, it aims to grow its store base by about 15% a year, though actual openings depend on when land and buildings are ready [5].

Stores, space and productivity

DMart’s stores are large. Its 500 stores at March 2026 covered 20.58 million sq ft, which works out to roughly 41,000 sq ft per store on average (our calculation from [1]). The count reached 518 stores and 21.4 million sq ft by 30 September 2026 [7].

Growth has been steady. The company had 284 stores in FY22, 324 in FY23, 365 in FY24, 415 in FY25 and 500 in FY26 [1]. On the final day of FY26, it opened its 500th store at Avadi, Chennai [1].

Each square foot sold about Rs 33,422 worth of goods in FY26, slightly below Rs 33,896 in FY25 [1]. Like-for-like growth, meaning sales growth in stores open at least two years, was 8.1% in FY26 [3].

DMart also employs a large workforce: 20,994 permanent employees and 75,577 on contract at the end of FY26 [1].

DMart Ready: the online arm that still loses money

DMart Ready is the online grocery business, run by a subsidiary called Avenue E-Commerce Ltd. It is a separate company with separate numbers.

In FY26, Avenue E-Commerce had revenue of Rs 4,093.61 crore, up from Rs 3,502.42 crore, and a loss of Rs 306.53 crore, wider than Rs 247.37 crore a year earlier [1]. Its EBITDA margin was minus 4.52%, compared with plus 7.85% for the stores business [4].

That gap explains a sharp change in strategy. DMart Ready operated in 18 cities at March 2026 [2]. In April-June 2026, it shut operations in seven cities “which were marginal contributors”, leaving 11 [6]. The CEO told analysts the plan is to prove “a truly sustainable, profitable e-commerce model” in those 11 cities first, with delivery to most customers within six hours [5].

DMart has chosen not to chase 10-minute delivery. “It is a model where we are choosing not to play,” Asawa said of quick commerce, adding that DMart Ready serves shoppers planning a large monthly or fortnightly purchase [5]. He has also said there is no plan to merge the online business into the store company [5].

How it compares on margins

Comparisons are tricky because companies define profit differently. The clearest one comes from DMart’s own two businesses: the stores earned a 7.85% EBITDA margin in FY26, while DMart Ready lost 4.52% [4].

For a quick-commerce rival, Eternal’s shareholder letter shows Blinkit made an adjusted EBITDA of Rs 184 crore in July-September 2026, or 0.9% of its net order value of Rs 20,940 crore [14]. In the same quarter, DMart’s stores reported an EBITDA margin of 7.3% on revenue of Rs 19,206 crore [7]. The two measures are not like-for-like: Blinkit’s figure is on order value and deducts rent, while DMart’s is on revenue and keeps lease costs below EBITDA [14][5]. Even so, the gap shows how different the two models are.

The latest quarter: July-September 2026

In Q2 FY27, DMart’s standalone revenue rose 18.4% to Rs 19,206 crore. EBITDA rose 14.1% to Rs 1,403 crore, but the EBITDA margin slipped to 7.3% from 7.6% a year earlier. Net profit rose 7.6% to Rs 804 crore [7]. Stores open two years or more grew 9.5% [7].

Asawa attributed the margin dip partly to people costs: “Wage inflation at entry-level has led to a marginal increase in operating expenses” [7]. Based on the filed results, gross margin for the quarter was about 14.1%, against about 14.2% a year earlier (our calculation from [9]).

For the half-year to September 2026, revenue was Rs 37,550 crore and net profit Rs 1,739 crore [7].

How it began

DMart was conceived in 2000 by Radhakishan Damani, already known as one of India’s most successful value investors [1]. The annual report says he wanted to test his ideas about the Indian consumer beyond investing, and after “a couple of years of introspection and research”, he chose value grocery retail [1].

The first store opened in Powai, Mumbai, in 2002 [1]. Growth was deliberately slow. “DMart took eight years to start its first ten stores,” the annual report notes, because Damani wanted to validate the model for profitability and scalability first [1]. Corporate operations were run for years from a small space carved out of one of the early stores [1].

The company listed on the BSE and NSE on 21 March 2017 after an IPO that raised Rs 1,870 crore [12]. Neville Noronha, who joined in January 2004 when DMart had five stores, steered it to more than 380 stores [11]. He stepped down after 21 years of service [1].

The challenges

Quick commerce

Apps such as Blinkit, Zepto, Swiggy Instamart, Amazon Now and Flipkart Minutes deliver groceries in minutes. In July 2026, an analyst noted that Amazon Now and Flipkart Minutes had picked up [5]. Asawa acknowledged that “some of the customers would be preferring to buy from quick commerce because of the convenience of faster delivery, especially for the lower basket sizes”, and said he did not expect that to change “over the next few years” [5].

His answer is that the monthly shop still favours DMart. He argues customers save “a significant amount of money in their monthly budget” by visiting [5]. At the August 2026 AGM, he said quick commerce and stores like DMart “will coexist and continue to grow”, since organised retail is still small [13]. DMart is not choosing locations to avoid quick commerce, and it brings in brands that scale up on those apps [5].

Saturated metro stores and rising costs

DMart’s oldest, busiest stores in cities like Mumbai and Bengaluru are hitting their limits. In April-June 2026, growth in older large-metro stores “was flat”, while non-metro stores grew well [6]. Asawa linked the slowdown to capacity, saturation and competition [5]. DMart’s usual fix is to open another store nearby, which spreads the crowd but slows same-store growth [5].

Costs are rising too. Employee costs grew 33.5% in FY26, as DMart built teams “ahead of the curve” [4][5]. Total debt, including lease liabilities, rose to Rs 4,079 crore by September 2026 from Rs 2,267 crore in March 2026 [8].

A new CEO

In January 2025, DMart announced that Neville Noronha would not seek renewal of his term and named Anshul Asawa as CEO Designate [11]. Asawa, an IIT Roorkee and IIM Lucknow alumnus, spent 30 years at Unilever, including as country head in Thailand [10]. He joined DMart on 17 March 2025, became CEO on 1 February 2026 and Managing Director on 1 April 2026, for three years [10]. Noronha’s term ended on 31 January 2026 [10].

Asawa has said the “foundational principles aren’t changing”. His priorities are building management bandwidth and “modernizing our technology and data stack” [5]. A former FMCG leader now runs a retailer that is, for many brands, “the number one retailer for them as an individual entity” [5].

Lessons for founders

Pick one promise and organise everything around it. DMart’s promise is the lowest price in the area. Owning stores, paying suppliers in a week and clustering stores all serve that one promise.
Pay suppliers fast and use it as a bargaining chip. DMart’s 7.2 payable days [4] turn reliability into lower purchase prices. For a small business, paying vendors early can sometimes buy better terms than a bank loan would cost.
Prove the model before you scale it. DMart took eight years to open ten stores [1]. When DMart Ready kept losing money, it shrank from 18 cities to 11 [2][6] instead of spending more to grow.
Know which game you are not playing. DMart said no to 10-minute delivery because it does not fit a low-cost, large-basket model [5]. Saying no clearly is a strategy too.

An explainer for general reading, based on public records as of 11 November 2026. Not investment, tax or legal advice.