Zomato Q3: Blinkit’s loss widens to Rs 103 crore as competition heats up; company says margin expansion paused

Albinder Dhindsa, CEO of Blinkit

Blinkit, the quick commerce arm of Zomato, posted an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of Rs 103 crore in Q3FY25, a 16 percent increase year-on-year (YoY) from a loss of Rs 89 crore incurred during the same period last year.

On a sequential basis, the adjusted EBITDA loss is significantly higher than Rs 8 crore recorded in Q2FY25.

On a YoY basis, the company's revenue jumped 117 percent from Rs 644 crore in Q3FY24 to Rs 1,399 crore in Q3FY25. And the company's gross order value (GOV) increased 120 percent YoY to Rs 7,798 crore in Q3FY25.

The company has seen losses widen at a time when more players like Flipkart Minutes have expanded operations and taken away market share from Blinkit and other incumbents. Similarly, major companies such as Amazon have also announced their entry into the space in a move that will intensify competition.

To ward off rivals, Blinkit has also advanced its expansion plans. “As of now, it seems like we will get to our target of 2,000 stores by Dec 2025, much earlier than our previous guidance of Dec 2026,” Deepinder Goyal, co-founder and group CEO, Zomato said in the company’s shareholder letter. As of Q3FY25, Blinkit's store count crossed the 1,000-store mark, one quarter ahead of plan.

“The losses in our quick commerce business this quarter are largely on account of pulling forward the growth investments in the business that we would have otherwise made in a staggered manner over the next few quarters,” he added.

Apart from Flipkart Minutes and Amazon, peers like Zepto and Tata BigBasket have also gained ground and are going aggressive in a red-hot market. This is also the first full quarter when old rival Swiggy has been a listed company.

As a result of increasing competitive intensity, Blinkit will see its margins flatline around the 18 to 20 percent range.

"...heightened competition has led to a pause in margin expansion in the business, which is expected and should be temporary," Albinder Dhindsa, CEO, Blinkit said.

On the back of rising competition, Zomato CFO Akshant Goyal said Blinkit will continue to incur losses. "As we continue to bring forward store expansion, our networks may have to carry a
greater load of under-utilized stores which will impact near-term profits in the next one or two quarters...Once we come out from this period of expansion, the business is likely to turn sharply from being loss making to becoming meaningfully profitable," CFO Goyal said.

Zomato also infused Rs 500 crore into Blinkit  earlier this month to expand operations faster amid increasing threat from rivals.