On the back of the performance of its quick commerce arm, Blinkit, which for the first time, outpaced the food delivery business Zomato in net order value (NOV) in the April-June quarter, shares of parent Eternal, climbed to a record high on Tuesday. Brokerages largely viewed the quarter positively, pointing to Blinkit’s accelerating growth and improving margins
As reported, on an overall basis, the company posted a sharp 90% year-on-year drop in net profit. Eternal shares on Tuesday ended the day at Rs 299.85 on the BSE, up 10.56%, supported by strong analyst commentary and increasing investor confidence in Blinkit.
Blinkit overtakes Zomato
Net profit fell to Rs 25 crore from Rs 253 crore a year earlier, missing estimates. However, consolidated revenue rose 70% year-on-year to Rs 7,167 crore, driven by significant growth in both Blinkit and the food delivery segments. Blinkit contributed Rs 2,400 crore in revenue, surpassing Zomato’s Rs 2,261 crore, and now accounts for nearly half of Eternal’s $10 billion annualised net order value (NOV) across B2C businesses.
The company added 243 new Blinkit stores during the quarter, taking the total to 1,544, and has set a target of 2,000 stores by end-2025. Blinkit’s NOV rose 127% year-on-year to Rs 9,203 crore, compared to a more modest 13% growth in Zomato’s food delivery NOV to Rs 8,967 crore. Management said margins in quick commerce have started to improve, with some cities operating at over 2.5%, and reiterated long-term targets of 5–6%.
Brokerages upbeat
Brokerage firm, Jefferies upgraded the stock to ‘buy’ and raised its price target to Rs 400 per share. “Progress in quick commerce suggests that our concerns on competition were unfounded. The worst of the competitive intensity seems to be behind us,” it said in its report.
On its part, CLSA maintained its ‘high-conviction outperform’ rating with a target of Rs 385, while Bernstein raised its price target to Rs 320, citing better-than-expected performance in the quick commerce segment. Emkay highlighted that food delivery will remain Eternal’s cash cow, while Blinkit’s Ebitda margins are expected to improve as stores mature.
Macquarie remained cautious, maintaining an ‘underperform’ rating and a price target of Rs 150. It noted that while Blinkit’s growth was strong, competition remains high and profitability may take longer to stabilise.
Blinkit holds a leading market share of around 40-45% in the quick commerce segment crowded by Zepto, Swiggy’s Instamart, Big Basket’s BBNow, Flipkart Minutes, and the latest entrant Amazon. To hold on to its market-leading position, the company is investing heavily to expand its dark store network in major cities and enter newer geographies, as it transitions the majority of its dark stores from a marketplace model to an inventory-led model.