Eternal‘s quick commerce arm Blinkit reported its first quarterly adjusted Ebitda profit of Rs 4 crore during the October-December quarter, but the company said that profitability will not follow a straight line as competitive intensity continues to shape pricing and expansion decisions.
Management said the milestone comes amid an increasingly aggressive market, with rivals such as Zepto and Swiggy’s Instamart cutting free delivery thresholds and waiving handling and convenience fees.
Reliance Retail’s JioMart, which handled an average 1.6 million daily orders in the December quarter and operates more than 800 dark stores alongside its wider retail network, has emerged as a strong competitor. Flipkart Minutes and Amazon Now are also scaling up, adding to pressure on pricing and customer acquisition.
Impact on Margins
“If these tactics start impacting our business, we would need to respond and that might impact our margins,” Albinder Dhindsa, head of Blinkit and incoming group CEO of Eternal, said.
While the company has resisted matching discounts in the past, it cut delivery charges in select markets last week after seeing competitive impact, a move that is expected to weigh on near-term margins.
Dhindsa described the current phase as one marked by irrational competition. “We will continue being watchful of competition, but largely focus on our own work as long as the competitive tactics don’t impact our business meaningfully,” he said, adding that sustained profitability cannot be built on heavy discounting.
Chief financial officer Akshant Gupta said quarterly profitability would therefore remain volatile. “Quarterly profitability is not guaranteed. However, we know with confidence that the underlying unit economics of our business are strong and improving,” he said.
Competition is also influencing Blinkit’s expansion plans. The company currently targets 3,000 stores by March 2027, a pace that assumes continued aggressive pricing by rivals. If competitive intensity eases, Blinkit could accelerate to 3,500–4,000 stores to sustain growth above 100% year-on-year, Dhindsa said.
He noted that deep discounting keeps demand skewed towards low-margin categories, making rapid expansion less attractive. “In such a scenario, accelerating store count or assortment is counter-productive, as the underlying demand profile pushes out the path to profitability,” he said, adding that store expansion makes economic sense only when customers shift to larger, higher-value baskets.
Targeting Long-Term Growth
Despite near-term uncertainty, management reiterated confidence in achieving long-term margins of 5–6% of net order value. Gurgaon and Noida already operate at around 5% adjusted Ebitda margins, while Delhi NCR averages about 3.5%. “These cities aren’t special. They are just more evolved,” Dhindsa said, pointing to their performance as a template for other markets.
Blinkit reported 14% sequential growth in net order value during the quarter, though Gupta said this understated underlying momentum. A reduction in GST rates lowered reported growth by around three percentage points, while festive demand had been front-loaded in the previous quarter. Adjusted for these factors, like-for-like growth exceeded 130% year-on-year, the company said.
On the social security code notified in November, Dhindsa said the impact would become clearer once rules are finalised, but added that the company does not expect any change to its long-term margin outlook.