Blinkit logs Rs 102 crore operating profit in Q1; sees more predictable competitive landscape

Quick commerce company Blinkit, India’s largest by order volumes, reported adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 102 crore in the April-June quarter, compared with an operating loss of Rs 162 crore a year earlier.

This marked the third consecutive quarter of operating profitability for the Eternal-owned company, even as the quick commerce sector continues to see intense competition. Blinkit's net order value (NOV) rose 86% year-on-year to Rs 17,132 crore, broadly in line with brokerage estimates.

Eternal chief executive and Blinkit founder Albinder Dhindsa, in a letter to shareholders, said the company's NOV growth during the quarter was largely driven by seasonal factors.


“It was largely seasonality and the NOV growth was on expected lines. We continue to focus our efforts on our three pillars of long-term growth - assortment expansion, geographical expansion, and demand densification. This quarter, we continued to make progress on assortment expansion in the top eight cities and geographic expansion in the next 30,” he said.

Dhindsa added that premiumisation through the rollout of ‘gourmet’ stores in select locations across the top eight cities would further strengthen Blinkit's assortment. “These gourmet stores offer our customers the ability to buy curated premium brands across categories. As these efforts compound over time, we expect NOV growth to remain robust,” he said.

Eternal reported a nearly threefold increase in operating revenue for the June quarter to Rs 20,211 crore. Net profit rose fourfold year-on-year to Rs 92 crore but declined 47% from the preceding quarter.

Competitive intensity

ET has reported that Blinkit, which processed 331 million orders during the April-June quarter, is facing increasing competition from ecommerce giants Amazon and Flipkart, both of which have expanded aggressively into 10-minute deliveries.

On Wednesday, however, Dhindsa said that while competitive intensity remained high, it had become more predictable.

“Our focus on long-term growth vectors remains unique in the market - we're the only player simultaneously investing in assortment depth, geographic expansion and supply chain infrastructure, while competitors generally remain focused primarily on pricing,” he said.

He added that pricing-led growth requires “sustained cash burn”, pushing quick commerce companies into “a systemic trap they can't easily walk out of - that is visible in multiple QC players struggling to balance both growth and profitability.”

“This is different from traditional ecommerce, where discounting can be weaned off gradually without hurting the business (much),” he said.