Walmart India posted a modest 4% growth in revenue, reaching Rs 5,200 crore for the fiscal year ending March 2024, according to its recent filing with the Registrar of Companies. Despite challenges in the wholesale sector, Walmart India saw an impressive reduction in its losses by 68%, positioning itself on a stronger financial footing. The company operates 28 B2B wholesale outlets under the “Best Price” banner, offering a mix of food and non-food items to business customers.
Revenue Growth and Key Contributors
Walmart India’s revenue climbed to Rs 5,200 crore in FY24, up from Rs 5,006 crore in FY23, marking a steady increase. The company’s income stems primarily from its wholesale operations, which include a range of products sold to small businesses, retailers, and institutions. Besides operational revenue, Walmart India reported Rs 5.42 crore in other income, up by 37%, which included gains from financial instruments and interest earnings on bank deposits.
The growth aligns with Walmart’s strategy to streamline its Indian operations while expanding product offerings in both food and non-food segments. This diversification across product categories has helped Walmart India to strengthen its position in the competitive B2B wholesale market, despite challenges from rising costs and fierce competition.
Cost Structure and Expense Reductions
In FY24, Walmart India made strategic moves to optimize its cost structure, resulting in a 2.4% decline in total expenses to Rs 5,354 crore. The biggest expense driver was the cost of stock-in-trade purchases, which increased by 5.7% to Rs 4,820 crore, reflecting rising costs associated with sourcing and inventory.
- Employee Benefits: Employee benefit expenses saw a slight decrease to Rs 155 crore, indicating cost-saving measures on staffing.
- Depreciation and Amortization: Depreciation expenses fell dramatically by 87% to Rs 33 crore, a significant drop that contributed to Walmart India’s improved bottom line.
- Finance Costs: Finance expenses rose marginally to Rs 69.64 crore, indicating that financing costs remain a manageable part of Walmart’s operational costs.
This careful expense management helped Walmart India contain its losses, resulting in a substantial improvement in its overall financial health.
Losses Reduced by 68% Amid Expense Control
Walmart India’s comprehensive loss for FY24 stood at Rs 151.91 crore, a notable 68% reduction from the previous year. This improvement highlights the company’s success in optimizing costs and streamlining operations. The reduction in losses also reflects Walmart’s broader commitment to profitability in a competitive wholesale landscape, where players like Reliance Retail and Metro Cash & Carry vie for market share.
Competitive Landscape and Flipkart’s Role in Walmart’s India Strategy
As Walmart India progresses in the wholesale sector, it faces stiff competition from organized retail giants like Reliance Retail and Metro Cash & Carry. These players dominate India’s B2B segment, forcing Walmart India to continuously innovate and enhance its Best Price outlets to attract business customers.
Walmart’s ownership of Flipkart, a leading e-commerce platform in India, plays a complementary role in its strategy. While Flipkart’s consolidated FY24 financials are yet to be disclosed, its marketplace arm saw a 26.4% increase in gross merchandise value (GMV), exceeding Rs 70,000 crore. Flipkart’s losses also narrowed by 13.2%, to Rs 4,248 crore, reinforcing Walmart’s commitment to growing its e-commerce footprint in India alongside its wholesale operations.
Outlook: A Path to Sustainable Growth
Walmart India’s focus on maintaining operational efficiency and expanding product offerings in the wholesale market bodes well for its future. By leveraging its extensive network of Best Price stores and strategic alignment with Flipkart, Walmart is building a solid foundation to navigate the competitive B2B landscape in India. As it continues to streamline costs and refine its product mix, Walmart India is well-positioned to further reduce losses and capture more of the evolving retail market.
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