BENGALURU: Eternal Ltd, parent of Zomato and quick commerce platform Blinkit, reported a sharp 346% year-on-year jump in net profit to ₹174 crore for the March quarter, driven by strong growth in Blinkit’s net order value and improving operating leverage.
The company's consolidated operating revenue rose 196% YoY to ₹17,292 crore during the quarter.
Quick commerce service Blinkit remained the primary growth driver with net order value (NOV) of ₹14,386 crore, up 95% from the year-ago period, helped by rapid unit expansion, as well as accelerated store rollout.
The service swung back to a positive adjusted Ebitda of ₹37 crore during the quarter, from a negative Ebitda of ₹178 crore in the same period last year.
Blinkit’s NOV growth CAGR is expected to be north of 60% in the next three years, Albinder Dhindsa, group CEO of Eternal, said in the letter to shareholders on Tuesday.
“That [indicated CAGR growth] translates to the business growing to >4x its current scale in three years. Quick commerce today is still concentrated in the top 15-20 cities and in a relatively narrow set of categories. The headroom for growth on geography, assortment, and frequency is substantial,” Dhindsa noted.
Blinkit fulfilled 273.9 million orders and added 216 dark stores during the quarter. Net average order value was ₹525.
Food delivery performance
Eternal’s food delivery business, led by Zomato, posted relatively steady growth, with revenue increasing 33% to ₹2,737 crore, continuing to support the company’s cash flows. NOV of the food delivery arm reached ₹9,757 crore, up 19% from the previous year.
Lowering the minimum order value for free delivery to ₹99 from ₹199 for Gold customers helped boost monthly transacting customer base to 25.4 million during the quarter, while driving higher frequency among existing budget-conscious customers, vice chairman Deepinder Goyal said.
“We expect growth to continue trending toward our long-term expectation of 20%+ YoY NOV growth, with margins remaining in the 5-6% range,” Goyal added.
However, net average order value declined, hurt by the lower minimum order value. “A declining NAOV is a natural and intended consequence of this strategy. If we can make restaurant food affordable for a much larger base of Indians, the addressable market expands significantly. What matters is whether the economics hold as NAOV comes down - and they do,” Goyal said.
The management, though, doesn’t look at the shift as a concern. Revenue per order “continues to improve,“ and operating cost efficiencies have kept pace, which is why margins have remained stable even as the order mix has shifted towards lower-value orders, he noted.
The firm also remains cautious about new bets like Bistro, Blinkit's quick snack delivery service. “This is still a small experiment for us. We are seeing very early signs of the business model evolving there but I won’t want to showcase this as a very big bet for us yet. But we are watching the space and observing what competition is doing,” Akshant Goyal, CFO at Eternal, said in an analysts’ call on Tuesday.
Eternal's shares on Tuesday closed 1.09% higher at ₹258.28 on the National Stock Exchange in a largely weak market.
The quick commerce landscape has grown increasingly competitive, with rivals stepping up investments and scale. Rival Swiggy’s Instamart has reported strong order growth and expanding coverage, while Zepto filed draft papers with the public markets regulator Sebi in December. Meanwhile, Reliance Retail’s JioMart has accelerated its quick delivery push, using its supply chain and merchant network to deepen reach and improve unit economics.
The intensifying competition has triggered higher spending across platforms on dark store expansion, customer acquisition and discounts, keeping profitability under pressure even as demand remains robust.
“At an aggregate level, the profitability has improved year-on-year consistently and we expect that trend to continue. We are more confident of getting to our guidance of 5-6% margins today than ever before - the only variable is the speed at which we get there,” Dhindsa said in the shareholders’ letter.
Eternal underwent a management reshuffle last quarter, with leadership changes aimed at sharpening execution across its businesses and driving long-term profitability. Goyal stepped down from the role of group CEO and handed over the reigns to Albinder the founder and CEO of Blinkit.
Meanwhile, NOV of District (Eternal’s events and movie ticketing business) grew 46% year-on-year to ₹2,736 crore, largely on account of growing engagement frequency among consumers. “We have previously guided toward $3 billion in NOV and $150 million in Adjusted EBITDA by FY30, implying approximately 30%+ YoY NOV growth from here. Despite significant INR depreciation (since the time we gave the guidance), we remain confident in that trajectory,” Akshant Goyal said.
