Flipkart’s losses pile up but revenue grows 50%

Jayadevan PK December 19, 2016 2 min

Story Highlights

  • Flipkart's revenue for the year grew 50%
  • The company's bottomline is still deeply in the red
  • Net margins slipped further to a negative 37.5%

It isn’t always easy to track India’s most valuable internet company, Flipkart. The privately held company doesn’t have to disclose its financials publicly and also operates multiple entities. But, to get an accurate picture of the company’s performance, we dug up the latest annual report of Flipkart Ltd, the ultimate holding company of the online retailer, registered in Singapore.

Here are some key metrics that shed light on the company’s performance in financial year 2016. Last year, we’d put out set of charts with Flipkart’s profits, revenue and margins for FY15 (Note: You’ll notice a slight difference between figures put out last year and this year because the company has made accounting adjustments to them).

Flipkart’s revenues 2016

At Rs 15,403.3 crores, Flipkart’s revenue for the year grew a healthy 50.3%. Note that the financial year ends in March 2016 and the revenue numbers here don’t account for its Big Billion Day sale or the topline addition that comes from the acquisition of Jabong this year.

Source: ACRA. Graphic: Nikhil Raj|FactorDaily
Source: ACRA. Graphic: Nikhil Raj|FactorDaily

Recommended read: Inside the controlled madness of Flipkart’s Big Billion Days monster sale

Flipkart profit/loss 2016

The company’s bottomline is still deeply in the red. Arguably, this is how internet businesses are built. However, Flipkart’s strategy of using its top position in the market to inch towards profitability seems to have taken a hit as competition from rival Amazon intensifies. Flipkart lost Rs 5,768.8 crores in FY16, up 86% from the previous year as it stepped up investments. The total number of units shipped last year stagnated and Amazon clawed marketshare from Snapdeal last year. We’d reported earlier that Amazon has plans to become profitable in India by 2018.

Source: ACRA. Graphic: Nikhil Raj|FactorDaily
Source: ACRA. Graphic: Nikhil Raj|FactorDaily

Recommended read: Project Fixkart (Part Deux)

Flipkart margins 2016

Flipkart’s net margins slipped further in 2016 to a negative 37.5%. This is 7.5% more than last year and doesn’t signal that the company is going to be on the path to profitability anytime soon.

Source: ACRA. Graphic: Nikhil Raj|FactorDaily
Source: ACRA. Graphic: Nikhil Raj|FactorDaily

Recommended Read: Revenues kick in for Flipkart’s high margin advertising business

Flipkart’s board

The company’s board remained unchanged in the year 2016, with co-founder Sachin Bansal as executive chairman and large shareholders like Lee Fixel (Tiger Global) and Oliver Rippel (Naspers) keeping their positions. However, we hear that it is likely to see some changes this year.

Source: ACRA. Graphic: Nikhil Raj|FactorDaily
Source: ACRA. Graphic: Nikhil Raj|FactorDaily

Flipkart’s leadership team

As with the previous year, Flipkart saw its leadership churn in FY2016 as well. Binny Bansal became the chief executive officer of the company and Kalyan Krishnamurthy (formerly of Tiger Global) made a comeback at Flipkart. More recently, after a board meeting, its chief financial officer Sanjay Baweja quit. More changes are afoot at the company with Kalyan Krishnamurthy starting to play a larger role in running the online retailer.

Source: ACRA. Graphic: Nikhil Raj|FactorDaily
Source: ACRA. Graphic: Nikhil Raj|FactorDaily

Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.

Update (20 December 2016, 2.35 pm IST): The percentage increase in Flipkart’s revenue and loss were calculated wrongly in an earlier version of this post. The error has been corrected.