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Eternal's quick-commerce arm Blinkit had a strong quarter on paper. Orders grew fast, and the company made an adjusted EBITDA of Rs 102 crore. But a number hidden in the company's shareholder letter tells a different story. Blinkit said it loses about 1.8% of its NOV (the total value of orders) to things like expired food, damaged goods, items lost while moving them, and theft. Most of this happens with fruits and vegetables, which go bad quickly. Blinkit's NOV for the quarter was Rs 17,132 crore. If we take 1.8% of that, the loss comes to about Rs 308 crore. To put the numbers in context, that Rs 308 crore loss is already baked into Blinkit's cost of goods sold, the company's shareholder letter confirms this loss is deducted before Gross Profit is calculated, which in turn feeds into adjusted EBITDA. So the Rs 102 crore in adjusted EBITDA isn't separate from this loss; it's what's left over after the Rs 308 crore has already been absorbed. If we strip that loss out, then Blinkit's underlying profit for the quarter would have been several times higher than what was reported. In simple terms: inventory losses this quarter were close to three times the size of the profit that survived them. This is happening because Blinkit changed the way it does business. Earlier, Blinkit worked like a middleman; it just helped connect sellers and buyers and took a small cut. Now, Blinkit buys the goods itself and sells them directly. This is called an "inventory-led" model. This change makes Blinkit's revenue look much bigger; it grew 553% compared to last year, because now the full price of goods sold gets counted as revenue, not just the small commission. But it also means Blinkit now carries all the risk if goods don't sell in time or get damaged — and that risk is showing up as a meaningful drag on profit, even if it doesn't appear as a separate line item anywhere. Notably, this 1.8% number does not appear anywhere in Blinkit's official, audited financial reports. It was only mentioned in the shareholder letter, in a casual answer to a question. There's no comparison with previous quarters, so there's no way to know if this problem is getting better or worse. Meanwhile, Blinkit is also spending more money to build new stores. The cost of setting up one store has gone up from Rs 1 crore to Rs 2.5 crore. But the number of new stores added this quarter was only 200, which is one of its slowest quarters for store expansion. Bareback Media has recently raised funding from a group of investors. Some of the investors may directly or indirectly be involved in a competing business or might be associated with other companies we might write about. This shall, however, not influence our reporting or coverage in any manner whatsoever. You may find a list of our investorshere.