Blinkit's Margin Seen Improving After Shift To Inventory-Led Business Model

Eternal Ltd.-owned Blinkit's transition from a pure-play marketplace business model to an inventory-led business model will help expand operating margin, according to JM Financial.

The company is undertaking a major shift in its operations where it will directly sell to customers and hold its own inventory, moving away from its current reliance on third-party sellers. Partners have reportedly been notified of this change, which is scheduled to take effect from Sept. 1.

The change comes after Eternal approved a cap of 49.5% on its foreign ownership, ensuring the company meets regulatory criteria to operate an inventory-led e-commerce model.

"We believe the business model change will enable Blinkit to expand its category/merchandise offerings and reduce dependence on third-party-sellers (wherever applicable)," analysts at JM Financial said in a recent note. Compliance and legal costs can also be brought down.

They estimate Blinkit’s Ebitda margin as a share of gross order value (GOV) can improve by 50-110 basis points, which is meaningful because sustainable margin guidance is 4-5%.

The benefits of the inventory-led model will start accruing immediately post implementation, and Blinkit will see Ebitda break-even by the December quarter of this fiscal, ahead of the street expectations, analysts said.

The forecast for Blinkit's GOV is Rs 57,900 crore in FY26 and operating margin is at 0.5%. That will improve to 2% in FY27.

Notably, the food delivery segment Zomato's GOV is estimated to be Rs 45,400 crore in FY26 and an operating margin of 4.7% is expected.

JM Financial maintained a 'buy' rating for the Eternal stock with a target price of Rs 320.

Shares of Eternal ended 3% higher at Rs 271.25 apiece on the NSE, compared to 0.25% decline in the benchmark Nifty 50.