Walmart: Flipkart Is Finally Gaining in India's Quick-Commerce Race, but the Stock Isn't Cheap Enough Yet

I am holding Walmart (WMT) rather than upgrading after its fiscal-second-quarter report on August 20, even though the stock's post-earnings drop looks like an overreaction to the wrong number. Shares were sold off hard — down close to 9% in the session after the print — because U.S. comparable sales rose just 2.6%, the weakest quarterly gain in more than six years. Behind that headline, Walmart beat earnings estimates by about 9%, raised full-year guidance, and grew global e-commerce 23%. The most interesting development in the report, though, was buried in a part of the business most investors rarely open: Flipkart's two-year-old quick-commerce push in India is quietly turning into a genuine competitive win. That strengthens the bull case materially. It just does not, at today's valuation, make the stock cheap enough to chase the dip.

The quarter: earnings accelerated, the stock didn't care

The mechanics of the setup matter. Reported revenue rose 5.9% in the quarter while operating income jumped 28.8% — though that figure included a roughly 750-basis-point one-time benefit from tariff refunds; strip those out and underlying operating income growth still landed at the top of Walmart's prior 7% to 10% guidance range. Adjusted EPS of $0.81 came in about 9% ahead of the roughly $0.74 consensus. Management responded to a beat by raising its full-year sales and operating income outlook.

The market chose to fixate on the one soft number: U.S. comps of 2.6%, the smallest quarterly gain in over six years, a sign that even the retailer best positioned for a cautious American consumer is seeing shopping slow. That is exactly the kind of revenue deceleration a premium multiple cannot absorb without consequence — and the stock paid for it.

Here is what the selloff ignored. Global e-commerce grew 23%, with Walmart International's digital business up 19% and its marketplace net sales up more than 50%. Profit pools are rotating from the physical store to advertising, fulfillment and membership — global ad revenue grew 38% in the quarter. For a company this size, that mix shift is the entire reason the earnings engine can keep accelerating while store traffic cools.

The two-year-old Flipkart story that finally has numbers

This is the part worth slowing down on. Quick commerce — delivering groceries and essentials in minutes rather than days — is India's fastest-growing corner of retail, and Flipkart entered it late. Its service, Flipkart Minutes, launched in August 2024, fully two years behind Blinkit, Zepto and Swiggy's Instamart. Late entry is normally a death sentence in a land-grab market. Flipkart has used the time to build what now looks like the best network economics in the category.

Quick commerce runs on micro-fulfillment centers — small warehouses in residential neighborhoods that hold the inventory needed to reach a doorstep in ten to fifteen minutes. Flipkart said it has crossed the 1,000-center mark less than two years after launch and is pushing toward 1,500, a buildout that a Jefferies note projects will make it India's second-largest quick-commerce network by store count, behind only Blinkit's 2,243. That is the "closing in" part of the story, and it is measurable: Flipkart's own figures show order volume up roughly 400% year over year, and category data shows Flipkart Minutes processing more than a million orders a day by August — roughly a tenth of a national quick-commerce market now running at about 9.5 million daily orders, nearly double the level of early 2025.

The more meaningful metric is the one the market doesn't talk about. Flipkart Minutes carries the highest average order value among its peers — about 700 rupees (roughly $7.40) per Reuters, and 750 to 800 rupees by an Inc42 snapshot, against about 550 rupees at Blinkit and 390 at Zepto. That gap is not an accident. Flipkart is deliberately playing a different game: roughly 70% of its footprint sits in smaller cities and towns across more than 130 cities, where Flipkart says sales are growing 42 times faster than in the biggest metros, and where consumers build bigger, more planned baskets instead of impulse-scrolling for a single snack. Fewer orders, larger baskets, value-focused customers — that is a unit-economics profile that matters more than a dark-store headcount race.

The honest counterargument is that Flipkart is winning the wrong race. Datum Intelligence founder Satish Meena told Reuters it will be hard for Flipkart to take share from Blinkit, whose base is high-income, time-pressed households that order by convenience rather than by price. Flipkart trails badly on raw volume — a million-plus orders a day versus Blinkit's 3.4 to 3.6 million and a 36.7% category share. And quick commerce is still a subsidy war: every major platform is spending to defend share, and India's government has already stepped in, ordering companies in January to stop marketing "10-minute" delivery over rider safety. The realistic outcome is that Flipkart caps out as a clear number two or three by volume — but with the best per-order economics in the category, inside a parent that can monetize the traffic through advertising and cross-selling, that is the profile of a durable challenger rather than a cash incinerator.

What it means for Walmart's numbers

Keep this story in proportion, because the stock's reaction shows the market already does. Quick commerce sits inside Walmart International, which grew net sales 7.9% in constant currency in the quarter — and International itself is still a minority slice of a quarterly revenue base measured in the hundreds of billions. A 10% share of Indian quick commerce is a rounding error for Walmart's aggregate income statement, and the market was correct not to re-rate the stock on that number alone.

What deserves credit is what the Flipkart evidence says about the direction of the mix. Walmart named India among the markets driving improved e-commerce economics in its international segment, and said an advertising business that grew 20% was led by Flipkart ads. The parent's reward for the India ramp is not a line-item windfall; it is that its growth engines — digital, advertising, membership, international — now outpace the U.S. store business by a wide margin. That is precisely the story a premium multiple depends on continuing. Which makes the valuation question the entire article.

The valuation has not reset yet

Even after the roughly 9% give-back, Walmart still trades in the high 30s on a forward-earnings basis. The stock sat at about 41 times forward earnings in mid-June per GuruFocus, and this week's pullback trims that to the high 30s. By contrast, Target trades at about 17 times trailing earnings and yields roughly 2.8% (both as of the latest intraday data), while Walmart — after raising its dividend for the 53rd consecutive year — yields only about 1%. To be explicit about the basis: Walmart's multiple is forward-looking while Target's is trailing, but the gap in either framing is enormous.

For a company growing revenue in the mid-single digits, whose U.S. comp just decelerated to a six-year low and whose operating income growth was flattered by one-time tariff refunds, high-thirties or low-forties forward earnings is a "prove it" multiple. The Flipkart evidence is the strongest proof Walmart has to offer that the growth engines can keep running. But proof of a good story is not the same as a cheap stock, and the cheap-enough bridge has not been crossed.

The catalyst that could change the math

There is a real clock here, and it is the best reason to keep paying attention rather than walk away. Flipkart shifted its holding company from Singapore to India this March and is targeting a stock market listing in Mumbai before March 2027, with the quick-commerce expansion explicitly positioned ahead of the offering. Flipkart was last valued at about $37 billion in 2024, after Google took a minority stake. An IPO filing — and especially an offering price — would force the market to put a number on Walmart's India asset, the same way a spinoff crystallizes hidden value. That is the event that either validates Walmart's premium multiple or exposes how much of it was already priced in.

The risks that should keep conviction honest: the U.S. consumer is clearly slowing and comps are the direct evidence; quick commerce across the category remains loss-generating, so Flipkart's contribution could get worse before the network matures; and the tariff refunds that flattered this quarter's operating income are not a durable earnings source. None of these break the long-term case. They do mean the margin for error at this multiple is thin.

Investor takeaway: hold, and let Flipkart do the talking

I'm holding Walmart rather than adding here, and I'm equally unwilling to sell into the dip. The Flipkart Minutes ramp is the single most convincing argument to own the stock — genuine share gains, the best unit economics in Indian quick commerce, and a two-year-old operation still compounding inside a parent that can monetize it through advertising and fulfillment. The post-earnings pullback has improved the risk/reward versus a month ago, and another meaningful step down that pushes the multiple into the low thirties would turn this stock into a buy. So would the Flipkart IPO: a filing or a strong price on the India asset would confirm the growth engines are worth what the market pays for them. Until one of those two things happens, the right posture is to hold Walmart, watch Flipkart's filing, and treat any further weakness as the setup, not the finished opportunity.