Flipkart's loss increases by 51% to Rs. 4,362 crore
What's the story
E-commerce giant Flipkart's marketplace arm Flipkart Internet Private Ltd.'s FY22 report is a mixed bag. The company recorded a 31% increase in revenue.
At the same time, its net loss jumped to Rs. 4,362 crore. The increase in loss is driven by a jump in transportation, marketing, and legal expenses.
Flipkart Internet provides services such as payment gateway, internet technology, advertising, and logistics management.
Revenue and loss
The company's EBITDA is Rs. 3,925 crore in FY22
In FY22, Flipkart Internet's revenue saw a 31% year-over-year increase to Rs. 10,659 crore. Its operating revenue jumped from Rs. 7,804 crore in FY21 to Rs. 10,477 crore in FY22.
The company's net loss widened 51% to Rs. 4,362 crore. Its EBITDA (earnings before interest, taxes, depreciation, and amortization) ballooned from Rs. 2,267 crore in FY21 to Rs. 3,925 crore in FY22.
Context
Why does this story matter?
Flipkart Internet is responsible for running the Walmart-owned e-commerce giant's marketplace. The company's increase in expenses comes at a time when e-commerce companies are affected by inflation.
The increase in delivery expenses and advertising expenses is a testament to that. These increased expenses will affect the company's ability to generate profit.
It needs to be seen how this will affect its future aspirations.
Costs
Employee benefits made up for 25% of total expenses
In FY22, Flipkart Internet's expenses took a big leap across the board. Its employee benefits cost stood at Rs. 3,735 crore, accounting for 25% of total expenses.
Transportation costs increased from Rs. 3,444 crore in FY21 to Rs. 5,045 crore in FY22.
Advertising and promotions expenses and legal professional charges also swelled to Rs. 1,946 crore and Rs. 1,224 crore, respectively.
Revenue
Company's revenue from advertisements increased by 50%
Flipkart Internet's chief sources of revenue are fee collected from sellers, shipping services, and advertisements.
From the marketplace, the company made Rs. 2,823 crore. The revenue from advertisements saw a 50% increase to Rs. 2,083 crore.
The company generated 3,848 crore from logistics services, up by 15% from FY21, and Rs. 2,824 crore from computer development services.