Blinkit registered a larger EBITDA loss of Rs 8 crore in the July-September quarter, worsening from Rs 3 crore in the previous three months. Zomato’s CFO noted that many stores are profitable, but aggregate margins are under pressure due to ongoing investments in infrastructure, including new stores and warehouses that take time to become profitable.
In the July-September quarter, Blinkit experienced a setback in unit economics, reporting an EBITDA loss of Rs 8 crore compared to a loss of Rs 3 crore in the previous quarter. This deepening deficit highlights a decision for aggressive investments aimed at expanding operational capacity while postponing immediate profits. Zomato’s CFO, Akshant Goyal, clarified that while many stores are becoming profitable, overall margin growth remains elusive due to ongoing investment in infrastructure.
The recent financial performance of Blinkit sheds light on the challenges faced during a phase of expansion. Zomato, the parent company, is strategically enhancing their business with new stores and warehouses, which are crucial for long-term success. However, this expansion incurs short-term losses, as these new facilities require time to become fully operational and contribute positively to margins. Understanding this dynamic is essential for interpreting the current loss figures.
In conclusion, Blinkit’s unit economics for the July-September quarter reflect a significant EBITDA loss, emphasizing the trade-off between short-term losses and long-term growth through infrastructure investments. Zomato remains optimistic about scaling but acknowledges the challenges ahead as they strive for expansive profitability. The current strategy prioritizes building a robust operational base, even at the risk of immediate financial dips.
Original Source: m.economictimes.com
