Blinkit is moving from discount-led growth to a model focused on profitability and infrastructure. The quick commerce player reported a positive adjusted EBITDA for the fifth consecutive quarter as it prioritizes long-term unit economics.
Detailed Coverage
Blinkit, the quick commerce platform owned by Zomato, is reshaping its business strategy to prioritize long-term profitability over aggressive, discount-driven customer acquisition. This shift marks a transition toward building sustainable returns by focusing on infrastructure, inventory management, and operational efficiency rather than relying on heavy cash burn.
Scaling Infrastructure and Inventory
The company has moved toward a first-party inventory model, which provides greater control over product quality and availability. Over the past four years, the firm has invested approximately ₹3,000 crore in capital spending to build a vast network of stores and warehouses. These facilities now span 19 million square feet across more than 300 cities in India. By owning inventory and building dedicated supply chain infrastructure, Blinkit aims to create operating leverage, where the cost to serve each additional customer decreases as the network matures.
Financial Performance and Profitability
Recent performance metrics indicate progress in this strategy. Blinkit reported its net order value (NOV) at ₹17,132 crore, representing an 86% year-on-year increase. The company also turned in a positive adjusted EBITDA of ₹102 crore for the June quarter, marking five consecutive quarters of positive earnings. This is a notable turnaround compared to the ₹162 crore loss reported in the same period last year. Management expects profitability to be further supported by advertising revenue, which is projected to reach ₹20 billion by FY28, and a reduction in promotional spending.
Capital Efficiency and Risks
While the company is scaling, it acknowledges that quick commerce is an asset-heavy business. The focus on high returns on capital employed remains a primary objective, with management targeting nearly 40% returns from its mature store locations. Investors should, however, track potential risks, such as inventory losses, which currently stand at 1.8% of NOV, largely due to the perishable nature of the products sold. Improving supply chain efficiency and better replenishment cycles will be essential to keep these losses in check.
Looking ahead, the next key monitorable will be the company’s ability to maintain high customer retention and order frequency while scaling back on discounts. With annual store additions expected to moderate from the previous aggressive pace of over 2,000 locations, the market will likely focus on how well the existing store network contributes to overall margin expansion and sustainable cash flow generation.