Strong growth, improving profitability bode well for Eternal

While competition continues to intensify in quick commerce with the entry of Amazon Now, incumbents Eternal (Blinkit), Swiggy (Instamart) and Zepto may still be better placed since they are already high-recall for users and have put their warehousing and delivery chains in place.

- DEVANGSHU DATTA

Blinkit, for example, has hit significant scale in terms of dark stores and consumer base. The company has superior unit economics, leading to better Ebitda margins. Eternal also has ₹18,860 crore of cash to push marketing and dark store rollout.

Eternal’s food delivery business, Zomato, is also seeing improving profitability in the duopoly market. The industry may see 15-20 per cent growth rates (Yo-Y) and improving Ebitda margins as business scales. The segment is also a cash generator for the firm, with Gross Order Value (GoV) likely to see mid-teens growth in FY26 and contribution margin seen standing at 8.6 per cent (up 60 bps Yo-Y). There are also hopes the GoV will rise 21 per cent and contribution margin will expand to 9 per cent in FY27.

Blinkit had added over 1,000 stores in the past five quarters, and plans to add 500 more by December 2025 to hit 2,000 stores. It will target 3,000 in future. Blinkit management has said it would transition to an inventory-led model over the next two to three quarters, after becoming an Indian owned and controlled company (IOCC).