India’s Eternal expects growth in Blinkit, its quick-commerce business, to accelerate from the December quarter, as the company bets on a more stable competitive environment to expand faster without hurting margins.
“We don’t expect there to be a short-term margin reduction on account of accelerated store addition,” Chief Financial Officer Akshant Goyal said on a post-earnings call on Wednesday.
Eternal and rival Swiggy have been rapidly expanding their networks of small warehouses, known as dark stores, as the segment has emerged as a key growth driver for both companies even as spending on expansion and competition have put profitability in focus.
Blinkit’s net order value (NOV) rose 79.3% year-on-year to 209.40 billion rupees ($2.22 billion), while adjusted operating profit rose to 1.84 billion rupees from 1.02 billion rupees in the previous quarter.
Its adjusted EBITDA margin improved to 0.9% of its NOV from 0.6% sequentially.
Competition has become more predictable after intensifying over the past year, giving Eternal the confidence to expand faster, according to Goyal.
The company expects to have more than 3,500 Blinkit stores by March 2027 and about 5,000 by March 2028, up from 2,751 at September-end, with most additions in smaller cities.
Eternal’s overall revenue rose 77.6% to 241.38 billion rupees, beating analyst estimates of 239.21 billion rupees.
Consolidated net profit nearly doubled to 1.25 billion rupees but missed analysts’ average estimate of 2.71 billion rupees, according to LSEG data.
Eternal expects margins at Zomato, its food-delivery business, to stay broadly flat over the next one to two years as it invests in customer acquisition and increasing order frequency, prioritising growth, Goyal said.
Zomato’s NOV rose 21.5% to 114.45 billion rupees, while adjusted operating profit increased 25% year-on-year to 6.27 billion rupees. Adjusted EBITDA margin fell to 5.5% of NOV sequentially.
Separately, Eternal unveiled Dark.ai, a privacy-focused AI service it hopes to launch globally by the end of 2026.
($1 = 94.4600 Indian rupees)
Reuters
