Appeared this morning in the Mint:
Also, this section expanded
So, this is the math:
Top line Revenues for March 2013 = 1180 crores (190 million US$)
Cost of Operations for March 2013 = 1366 crores (220 million US$)
Loss for March 2013 = 281 crores (45 million US$) (note – loss seems to include other items like depreciation etc)
Cash Loss (assumed) for March 2013 = 186 crores (30 million US$) ( deducting costs from revenues)
Deductions:
The net loss is currently 24 % of the top line (= 281/1180 %)
This means that:
If Flipkart wants to achieve a 1 billion dollar top line by 2015 (As stated by Bansal), it will at the minimum, need to burn a LOT more money in the next 2 years, as demonstrated below:
Assume that top line will be US $ 500 million (2.5x of current?) in the year ended March 2014
The burn will be 125 million $ (assuming 25%)
Assume that top line will be 1000 million (1 billion) in the year ended March 2015
Burn will be 250 million US$ (assuming 25%)
Total burn in the next 2 years = 375 million
Given that the Company raised 360 mn dollars this year (and has US$ 26 million as on March 2012), it has a total of 386 million. That’s almost the exact amount in needs to cover its cash burn for the next 2 years as per my calculations 🙂
Conclusions:
So, at a 1 billion US$ top line in March 2015, the Company will IPO at least at 2-5 billion? (Read the analytics here)
That’s GREAT because the company will return at least 3-4 x on the money of the investors (blended) as per my analysis here.
3 Deep Questions:
1. Who will fund the ongoing losses of Flipkart AFTER the IPO?
If Flipkart loses 25% on its top line (and assume that the loss % goes to a lower number of 15%), then at 2 billion top line for 2016, it will still need 300 million US$ to burn? Who will fund that?
2. If the burn is to be stopped, then Flipkart needs to INCREASE its prices by 25%!
Is that possible ever, given that Flipkart is the place where consumers have got addicted to buying stuff cheap, supported by DREAM deliveries?
3. Will stock markets accept Flipkart to be ‘the Amazon’ of India and give it valuations like it does to Amazon despite losses (although the losses of Amazon are intentional in the case of Amazon)?
***
Please reply and do read my earlier Doodh ka Doodh, Paani ka Paani analysis of Flikpart :
Alok Rodinhood Kejriwal
They DESERVE ALL THE MONEY they have earned.
Let me say that this is the MOST SPECTACULAR story in Internet coming out of India and the founders have all the right to have earned that money.
If I were them, I would have demanded 3 times more…
Hari Rastogi
Some eyebrow raising questions :
Question: How can AAM Retailer compete with these loss making foreign funded online retailers?
Question: How much more they will make mockery of Indian system? When foreign funding is not allowed in e-commerce in India they are keep on raising more funds?
Question: Why the investigation against Flipkart is pending from more than 1 year?
Last year on 30-Nov-2012, Flipkart offices were raided for violation of FDI regulations and investigation was started.
Question: How much of this Rs.3500.00 crore of funding received by Flipkart is going to govt officers and politicians?
Question: Why political parties not wanting to come under RTI?
This is why we are not able to get data that how much donation is given by Flipkart to Political parties.
Question: How much bribe media houses are getting from flipkart to make their headlines “ Flipkart sales soars..” instead “ Flipkart is making Rs.281.00 crore of losses and one of the MAHA CHOOOR company”
Question: Who killed RTI?
We are not getting any response for our RTI application filed in Ministry of Finance to know why so much delay in investigations against Flipkart.
A small story to understand further questions:
What if a very rich US company name WEST INDIA Company (For example) will start selling all agricultural products Rs.1.00 per kg in India for 8 years. The farmer will lose their interest in farming because of losses and join some labor jobs. Tractor, fertilizer and seed companies will closed down. The whole eco system of farming will get destroyed. After that the WEST India Company will start selling at Rs.1000.00 per kg to make profit and recover previous losses.
Question: Is Flipkart story same?
Question: is Flipkart scam the BIGGEST SCAM in the history of India in which all are getting bribe?
1-Customers- They are selling at loss price and for any complain no question asked return and free show police.
2- Govt officers- For not completing any investigation against FLIPKART.
3- Politicians- For not taking any action.
4- Founders- Taking Rs.10.00 crore per year salary for loss making company. Today they hardy have any stake and taking high salary as a bribe to sir mai India ka pura retail market aapke kadamo me la ke rakh dunga.
5-Media- For keep on writing positive and keep creating some news a company which has nothing but huge losses, Anti competitive business and violating many regulations.
Note: If any honest and independent investigation agency will conduct the investigation against Flipkart, we are sure that we have enough proof that many will go to jail for many years. All the proofs are available in the Facebook page of WWA( WE WILL ACT) check now. . .
Hari Rodinhood Rastogi
Activist WWA ( WE WILL ACT)
Mo: 9663697196
http://www.wewillact.com
https://www.facebook.com/wewillact
Sanchita Dutta
FLIPKART INSIDE STORY PART ONE (A Few Inside points to note)
1. Flipkart is essentially a Bangalore based co though it now has warehouses in other cities. they sell themselves through their firm called WS Retail in a marketplace format where other sellers compete with them.
2. The use a sophisticated algorithm which puts certain sellers on top thus increasing chances of sales many times over compared to others. it is a function of price, feedback rating, declared shipping time and % returns/refund from your account. So someone with NOT the lowest price too can come on top. ( this is different from AMAZON.IN where Lowest priced seller will always come on top.
3. Items where WS Retail is a seller too, this algorithm does not apply and their rates and deal always come on top whether they are lowest or not.
4. Marketplace model is all profit for them. ZERO RISK for them. If a Manufacturer warranty item such as Sandisk pen drive is sent to a buyer, he opens its sealed pack, does not like or doesnt work to his liking, he can return the item. For every such return, both ways shipping, Flipkart commission(10%plus) and an opened unsaleable item all charged to seller irrespective of whose fault it is.
5. Rate of return and Refusal of items by buyers is HIGHEST and many times over compared to all other sites ( we sell on snapdeal, ebay, amazon, shopclues, flipkart and our own site http://www.indiacod.com(where we sell the same items CHEAPEST 😉 ). So there is something SERIOUSLY WRONG in their buyer verification system esp in COD cases.
6. This point is further re-iterated by the fact that snapdeal has almost 100% transactions as COD (atleast those we r receiving) but their returns rate is among the lowest.
7. Flipkart is slowly but surely exiting segments. the site has altogether REMOVED TELEVISIONS as an item. that is they dont sell this item anymore.
Now whether they are making any money in the items that they are selling or not, will bring out in second part
(http://www.indiacod.com)
Haardik Joshi
Hi,
Well Super & Simple analysis of the flipkart P&L…. i seriously have my doubts on the way the current lot (most of them) are running their VC funded marketplace sites…. i think its a BUBBLE waiting to burst. Also i just do not understand how do the VCs calculate the net worth of a company when its skimmin off the top ( 25% loss) … what if today on Flipkart starts loosing customers/buyers ….if just a paper valuation i think!!
If someone knows something better , pls enlighten me !! 🙂
Cheers…hj