Zomato Estimates Blinkit's Losses Are Coming Down Every Month

The acquisition of rapid commerce company Blinkit by Zomato has generated a lot of buzz and even affected the share price of the former on the stock exchanges. Profitability issues were of primary concern, as Zomato and Blinkit (previously Grofers) are both suffering significant losses. Blinkit's losses are decreasing month over month, according to Zomato CFO Akshant Goyal, who addressed the concerns raised during the shareholders' meeting. A loss of INR 92.9 Cr is anticipated in July, down from INR 204 Cr in January 2022.

He continued by saying that operating leverage and better performance were reducing the losses. Given the significant operating leverage in the firm, losses decrease when GOV (gross order value) per day per store increases.

Additionally, Zomato anticipates that by the end of July 2022, Blinkit will have received 83 lakh orders, up from 79 lakh in May 2022 and 51 lakhs in January 2022. It predicts that by the end of July, there would be 25 lakhs of monthly transacting consumers, up from 2.3 lakhs in May and 1.5 lakhs in January 2022. By the end of July, the monthly GOV for Blinkit is expected to rise to INR 482.7 Cr from INR 402.8 Cr in May and INR 295.5 Cr in January.

According to estimates, revenue will increase to INR 74.9 Cr by the end of July 2022 from INR 58 Cr in May 2022 and INR 22.1 Cr in January. Zomato forecasts that losses will decrease to INR 92.9 Cr by the end of July from INR 107.7 Cr in May 2022 and INR 204 Cr in January of this year. It is interesting to observe that Blinkit has not yet consolidated its balance sheet even though the month is already over. Additionally, it has not yet released its financial information for the April through June 2022 quarter.

Zomato itself reported a consolidated loss of INR 186 Cr in the first quarter of FY23, down from INR 360 Cr in the same quarter of FY22 by a 48 per cent YoY margin. Additionally, its operating income increased by over 67 per cent year over year (YoY) to INR 1,413.9 Cr.

As rapid commerce emerges as a preferred method for customers' shopping baskets across a variety of categories, including groceries, fruits and vegetables, beauty and personal care, OTC medications, and stationery products, Blinkit will further enhance Zomato's value. Zomato is also planning to merge all of its companies (dining and delivery, rapid commerce through Blinkit, and nutraceuticals through Hyperpure) under a single parent company named Eternal.