Flipkart narrows FY25 losses with aggressive cost-cutting measures

Under significant pressure to demonstrate a clearer path to profitability ahead of a planned Initial Public Offering (IPO) in 2026, Walmart-owned Flipkart successfully narrowed losses across most of its major group companies in Fiscal Year 2025 (FY25) through aggressive cost-cutting measures.

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While this financial discipline led to a stronger bottom line, the company's revenue growth was modest, reflecting a broader slowdown in the online retail sector.

Flipkart’s marketplace arm, Flipkart Internet, saw its net loss narrow significantly by 37 per cent to Rs 1,494 crore (approximately $180 million) in FY25.

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This was achieved primarily through efficiency gains and a notable 8 per cent decrease in employee benefit expenses. The company’s in-house delivery arm, Ekart Logistics reduced its losses by 12 per cent while online travel portal Cleartrip cut its net loss by 20 per cent from the previous fiscal year.

The company has been limiting warehouse expansion and focusing on operational tightening, a clear signal to investors that it is prioritizing financial health over aggressive, unchecked growth.

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Despite the improved bottom line, revenue gains were contained. Flipkart Internet's revenue from operations grew by 14 per cent to ₹20,493 crore, a deceleration compared to its 21 per cent growth in FY24.

This slowdown reflects broader economic headwinds and subdued consumer spending in the e-commerce market.

SUSTAINABILITY

However, the company managed to boost revenue in its high-margin segments such as marketplace fees which more than doubled to Rs 7,751 crore and advertising revenue which grew by 27 per cent to Rs 6,317 crore, underscoring an intensified monetization strategy.

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In contrast, the e-commerce company’s revenue from logistics services dropped sharply, suggesting a mix of internal restructuring and external market shifts.

The most positive financial news came from Flipkart's fashion and beauty platform, Myntra. It emerged as a standout performer, reporting a net profit of Rs 548 crore in FY25.

SUSTAINABILITY

Myntra's revenue also grew by 18 per cent, showcasing the company's successful pivot in the fashion segment.

The push for profitability is critical as Flipkart prepares for a major public listing, anticipated for late 2025 or early 2026.

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The company is also undergoing a complex process to relocate its corporate domicile from Singapore to India, a move necessary for a domestic IPO and one expected to incur a hefty tax bill similar to its sister company, PhonePe.

The core challenge for Flipkart remains balancing the need for sustained, accelerated growth in competitive areas like quick commerce (Flipkart Minutes) with the investor demand for a clear, imminent path to overall group profitability.

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