Eternal’s quick commerce arm Blinkit, for the first time, outpaced the food delivery business Zomato in net order value (NOV) in the April-June quarter, even as higher investments into the segment dragged down the company’s consolidated net profit by 90% year-on-year to Rs 25 crore, sharply below Bloomberg estimates of Rs 107 crore.
Despite the profit miss, Eternal’s shares rallied 7.5% after the announcement of the results, to finally close up 5.38% at Rs 271.20 on the BSE.
Blinkit surpasses Zomato in NOV, boosts revenue
While NOV for Blinkit soared 127% year-on-year to Rs 9,203 crore, Zomato’s NOV rose a modest 13% to Rs 8,967 crore. This shift underlines the growing heft of Blinkit, which now accounts for nearly half of Eternal’s $10 billion annualised NOV across B2C businesses. CFO Akshant Goyal confirmed the inflection point, stating, “Quick commerce is now our largest B2C business”.
The net profit slump, despite a strong topline beat, was driven by increased spending on Blinkit’s store and warehouse expansion. Consolidated revenue rose 70% y-o-y to Rs 7,167 crore, above Bloomberg’s estimate of Rs 6,624 crore. Adjusted revenue, which includes customer delivery charges and platform fees, stood at Rs 7,563 crore.
Store expansion
Blinkit added 243 new stores during the quarter, taking the total to 1,544, with plans to reach 2,000 stores by the end of 2025. The company also expanded its warehousing footprint by 0.4 million sq ft, now operating over 5.6 million sq ft nationally. CEO Albinder Dhindsa said, “We see enough room for store growth in all cities… Delhi, for example, is still growing at 70%+ YoY (NOV growth)”.
The quick commerce business clocked Rs 2,400 crore in adjusted revenue, up 154% y-o-y, while Zomato’s food delivery revenue rose 16% to Rs 2,261 crore. Margins also improved. Blinkit’s adjusted Ebitda margin moved up to -1.8% of NOV, from -2.4% in the March quarter. Some cities are already operating at 2.5%+ margins, with long-term goals of reaching 5-6%, the company said.
“The long-term profitability of the business is not a concern… margins have likely bottomed out, and if the competitive environment remains stable, we should see an uptick as stores mature,” the management said in a shareholder letter.
Despite high investment intensity and a crowded market featuring Zepto, Instamart, BBNow, and Amazon, Eternal reiterated its stance on holding leadership. “Under no circumstances, will we let go of our market position here,” the company stated, adding that smaller cities are showing early signs of profitability due to relatively lower costs and a narrow 10% Net AOV gap compared to metros.