India's Eternal Bets on Efficiency to Boost Blinkit Profitability

Eternal has projected stronger-than-expected profitability for its quick commerce business, Blinkit, with the company indicating that the unit is on track to achieve the upper end of its earlier guidance range. The improvement comes as Blinkit continues to scale its operations and enhance efficiency in India's intensely competitive quick-commerce market.

Blinkit has emerged as a key focus for investors, complementing Eternal's core food delivery business under the Zomato brand, which remains the company's largest contributor to profits.

During the quarter ended June, Blinkit's adjusted EBITDA margin improved to 0.6% of net order value, doubling from the previous quarter, while adjusted EBITDA increased to ₹1.02 billion, reflecting stronger operational performance.

The margin improvement marked "the inflexion investors have been waiting for," said ​Vaqarjaved Khan, senior fundamental analyst at Angel One, adding it lent support to management's ​long-held focus on customer density and order frequency.

Blinkit continued its rapid expansion during the June quarter, with net order value surging 86% year-on-year and the addition of 200 net new stores, taking its total network to 2,443 outlets.

The company said it now expects Blinkit's long-term adjusted EBITDA margin to settle at the upper end of its previously guided 5%–6% range, driven by larger store formats and ongoing investments that are improving operating efficiency. However, it did not specify a timeline for achieving this target.

According to Chief Financial Officer Akshant Goyal, most of Blinkit's growth was fuelled by customers placing orders more frequently rather than increasing their average order value.

Eternal reported a consolidated net profit of ₹920 million for the quarter ended June 30, lower than analysts' estimate of ₹2.58 billion, according to LSEG data. The company had posted a net profit of ₹250 million in the corresponding quarter last year.

While acknowledging that competition in the quick-commerce segment remains intense, Eternal said the market has become more predictable. The company noted that sustaining growth through deep discounting requires continued cash burn and is difficult to maintain over the long term.

Instead, Eternal said it will continue to prioritise expanding its product assortment, strengthening its supply chain and widening its geographic footprint, rather than relying primarily on price-led competition.

For the quarter ended June 30, the company reported revenue of ₹202.11 billion, more than 2.5 times higher than a year earlier, though slightly below analysts' estimate of ₹204.39 billion, according to LSEG data.