Blinkit Q4: Adjusted EBITDA Loss Widens 381% YoY To INR 178 Cr

Amid cut-throat competition in the quick commerce segment, Blinkit’s adjusted EBITDA loss widened over 381% to INR 178 Cr in the March quarter of the fiscal year 2024-25 (Q4 FY25) from INR 37 Cr in the year-ago quarter.

On a quarter-on-quarter basis, adjusted EBITDA loss surged nearly 73% from INR 103 Cr.

The degrowth came on account of accelerated investments in expanding the quick commerce dark store network. Blinkit added a record 294 new stores in Q4 FY25 versus 216 in Q3 FY25.

“In the near term, the losses will increase or decrease depending on how the pace of expansion and competitive intensity play out over the next few quarters. Sustained profitability will be an outcome of focusing on the right long-term priorities,” Blinkit CEO Albinder Dhindsa said.

In the same breath, Eternal CFO Akshant Goyal said that the company will “aggressively” look to expand Blinkit’s market share, especially in wake of increased competition and “will not let any short-term profitability goals come in the way of that”.

The quick commerce arm reported an operating revenue of INR 1,709 Cr in the reported quarter, a jump of 122% from INR 769 Cr in Q4 FY24. Sequentially, it rose 22% from INR 1399 Cr.

The growth in the top line came on the back of a sharp increase in gross order value (GOV), which skyrocketed 134% YoY and 21% QoQ to INR 9,421 Cr during the quarter under review.

However, the average order value on Blinkit declined to INR 665 in Q4 FY25 from INR 707 in Q3 FY25.

According to Dhindsa, about 40% of Blinkit’s overall store network is currently “underutilised”. Despite that, the contribution margin (which includes all expansion costs except capex) rose to 3.9% from 3.8% of net order value (NOV).

“Margin expansion, especially in the more mature parts of our network, could have been higher if not for the heightened competitive intensity,” Dhindsa stated.

Starting Q4 FY25, Eternal has begun reporting NOV in addition to the gross order value (GOV) to track the growth in its B2C businesses, which include food delivery (Zomato), quick commerce (Blinkit) and going-out (District).

The company defines NOV as GOV minus discounts offered on the aforementioned B2C platforms.

Over the last few quarters, the share of non-grocery category items sold on Blinkit has increased significantly. These items come with MRP, which is significantly higher than the selling price. This is causing a “widening gap” between GOV (which is reported on MRP) and what the customer pays for such items on Blinkit, Eternal said, adding that NOV corrects for this anomaly.

Blinkit To Shift To Inventory Ownership To Improve Bottom Line

Earlier this month, the board of Eternal approved a proposal to cap the foreign shareholding at 49.5%. By limiting foreign ownership, Eternal aims to preserve its status as an Indian-owned and controlled entity (IOCC).

In its shareholders’ letter today, Eternal CFO Akshant Goyal said that as an IOCC, the consumer internet company now has an option to also own inventory in the quick commerce business, besides running a marketplace business.

“We believe that it is important, and is another concrete step towards making our business more resilient in the long-term,” Goyal said.

However, he did not disclose whether Eternal is going to do 100% owned inventory (1P) or a hybrid 1P+3P model going forward.

While Goyal did not specify how much capital the company plans to deploy towards inventory ownership, he did give a ballpark estimate. If Blinkit owned 100% of the inventory in FY25, Eternal would have deployed less than INR 1,000 Cr of working capital towards inventory ownership (about 5% of FY25 NOV of about INR 22,000 Cr), he said.

“This is because of the meaningfully higher inventory turns in quick commerce. Hence, we expect working capital investments in the context of the overall scale of the business to be fairly low. Whatever investments we make will also yield a healthy ROCE given the incremental growth and margin opportunity,” Goyal said.

Overall, Eternal reported a 15% year-on-year decline in its adjusted EBITDA profit to INR 165 Cr due to the impact of accelerated store expansion in quick commerce.

Blinkit CEO Dhindsa also noted that moving to inventory ownership will lead to “some margin expansion”, which “might just offset the impact of competitive intensity in the quick commerce segment”. However, he was hesitant to change the stated long-term adjusted EBITDA margin guidance of 5-6% of NOV.

Dhindsa clarified that even if Blinkit shifted to inventory ownership, which is pending approval from Eternal shareholders, it does not plan on launching any private label quick commerce apps. 

Notably, Blinkit launched a standalone 10-minute food delivery app Bistro in January this year. Over the past few months, restaurant bodies have raised concerns that private labelling by players like Zomato and Swiggy will wipe out small, localised food businesses.

Rising Quick Commerce Competition Hurting Eternal’s Food Delivery Business

Eternal’s consolidated net profit slumped 77.8% to INR 39 Cr in Q4 FY25 from INR 175 Cr in the year-ago quarter amid a slowdown in food delivery and intense competition in the quick commerce segment. Sequentially, the bottom line declined 33.9% from INR 59 Cr.

This came despite the growth in the top line. Revenue from operations surged 64% to INR 5,833 Cr during the quarter from INR 3563 Cr in Q4 FY24. The top line grew 7.9% from INR 5,405 Cr on a QoQ basis.

Had Eternal not raked in INR 368 Cr in other income, it would have slipped into the red in the March quarter. Read our full coverage of Eternal’s Q4 FY25 numbers here.