1 month ago
Blinkit raises capital expenditure for long-term growth
Blinkit, a company that delivers groceries quickly, is spending more money to build bigger stores and better technology.
This is because they believe that investing in their infrastructure will help them grow in the long term.
They used to focus on giving discounts to attract customers, but they found that this leads to higher losses and customers leaving when the discounts stop.
Now, they are focusing on making their stores more efficient and adding more products.
This has helped them make a profit and improve their financial performance.
However, this strategy requires more capital expenditure, and the company is counting on higher volumes to achieve their financial goals.
Competitors are still using discounts, but Blinkit believes their approach will lead to sustainable growth.
Blinkit has increased its capital expenditure per store to Rs 2.5 crore to invest in larger dark stores and advanced warehousing technology.
The company has raised its long-term adjusted Ebitda margin guidance to 6% of net order value (NOV).
Blinkit's adjusted Ebitda margin improved to 0.6% of NOV, turning a Rs 162 crore loss into a Rs 102 crore profit.
Net order value (NOV) grew by 86.2% to Rs 17,132 crore, and the company added 200 net stores to reach 2,443.
Blinkit is focusing on demand densification, assortment, and geographic expansion as its three growth pillars.
- Who
- Blinkit, a quick commerce company under Eternal.
- What
- Blinkit is increasing its capital expenditure per store and adjusting its growth strategy.
- Where
- The strategy is being implemented across Blinkit's operations.
- When
- The changes are reflected in the Q1FY27 shareholder letter.
- Why
- Blinkit aims to achieve sustainable growth through infrastructure investments rather than discounting.
Investment in Infrastructure
Discount-Driven Growth
Growth Strategy
Investment in Infrastructure
Blinkit is focusing on infrastructure investments, including larger dark stores and advanced warehousing technology, to achieve sustainable growth.
Discount-Driven Growth
Competitors like Zepto, Amazon Now, and Flipkart Minutes are aggressively using discounts to attract customers.
Customer Retention
Investment in Infrastructure
Blinkit believes that investing in infrastructure leads to customer loyalty and long-term growth.
Discount-Driven Growth
Discount-driven strategies may lead to customer churn once incentives are removed.
Financial Performance
Investment in Infrastructure
Blinkit's adjusted Ebitda margin improved to 0.6% of NOV, turning a loss into a profit.
Discount-Driven Growth
Discount-driven growth requires sustained cash burn, leading to higher losses.
Key facts
- Capital Expenditure per Store
- Rs 2.5 crore
- Adjusted Ebitda Margin Guidance
- 6% of net order value (NOV)
- Adjusted Ebitda Margin (Q1FY27)
- 0.6% of NOV
- Net Order Value (NOV) Growth
- 86.2% to Rs 17,132 crore
- Number of Stores
- 2,443
- Contribution Margin
- 5.3%
- Net Average Order Value
- Rs 518
- Orders per Store per Day
- 1,600
Quotes
Albinder Singh Dhindsa
Blinkit group chief executive
“"Pricing‑led growth requires sustained cash burn, and leads quick commerce companies into a systemic trap they can’t easily walk out of."”
financialexpress.com
“"If a customer is looking for a discount, he or she has so many options. So they will switch. That cost is your sunk cost, it’s gone."”
financialexpress.com










