Blinkit Analysis: JM Financial’s View – Explained

Key Points

• Blinkit’s growth slowing due to increased competition and a tough comparison.
• Long-term growth still strong, driven by Blinkit’s improving profits.
• Blinkit’s lower costs give it an advantage over rivals.
• Blinkit’s user base remains loyal, supporting stable demand.
• Blinkit’s losses are expected to decrease over time.
• JM Financial recommends ‘Buy’ with a target price of ₹400.

JM Financial has examined Blinkit’s situation and believes Blinkit’s growth will slow down in the next few months. This is because lots of companies are competing and it’s harder to grow as quickly. However, the brokerage still thinks Blinkit will grow a lot over the long term because the company is becoming more profitable.

Blinkit’s costs are lower than other quick delivery companies. This means Blinkit can afford to spend money to grow its business. The brokerage also noted that Blinkit’s users continue to order frequently and spend a good amount of money each time, which is great for the company’s future.

While Blinkit’s losses are still high, the brokerage expects these losses to go down over time. This is because Blinkit is getting better at making money and will also be able to make more money as it gets bigger. Blinkit’s lower per-order losses further highlight its strong business model.

Beyond quick delivery, JM Financial also sees good growth in the food delivery market. Blinkit is expected to become profitable around the first quarter of 2027, assuming competition stays at its current level.

Overall, JM Financial still recommends investing in Blinkit because of its strong position in the market, its good business practices, and its solid financial health. They’ve set a target price of ₹400 for Blinkit’s stock.

“Investing in Blinkit is a strategic choice based on long-term potential and a resilient business model.”