Newsletter
Eternal's June quarter was a tale of two businesses.
Profit nearly halved year-on-year, its core businesses continued to grow strongly, with Blinkit once again emerging as the biggest growth engine.
The numbers: net profit came in ₹92 crore, down from ₹174 crore a year ago. But the headline profit number doesn't tell the full story.
EBITDA, a measure of operating profitability, rose 22% to ₹594 crore.
The company's cash balance increased for the second consecutive quarter to ₹18,288 crore, giving it one of the strongest balance sheets among Indian internet companies.
Blinkit is now the growth engine: if one business stood out this quarter, it was Blinkit.
Its Net Order Value (NOV) jumped 86% YoY to ₹17,132 crore, comfortably ahead of market expectations. Blinkit also opened 200 new dark stores, taking its network to 2,443 stores.
More importantly, it remained EBITDA positive for the third straight quarter, reporting ₹102 crore compared to ₹37 crore in the previous quarter and a ₹162 crore loss a year ago.
That matters because quick commerce has long been criticised for burning cash. Blinkit is now proving that rapid expansion and improving profitability can happen together.
Food delivery is growing steadily: Zomato's food delivery business also delivered a solid quarter.
Its Net Order Value rose 20% to ₹10,769 crore, landing at the upper end of the company's guidance.
Growth isn't as explosive as Blinkit's, but that's expected. India's food delivery market is far more mature today, with growth increasingly coming from higher order frequency and expanding into new cities rather than first-time users.
Meanwhile, District, Eternal's going-out business, also improved, with its quarterly loss narrowing to ₹65 crore from ₹81 crore.
No margin sacrifice for now: one of the biggest takeaways from the shareholder letter was management's confidence.
Deepinder Goyal said,
"If there comes a point where we have to spend margin to grow, we will, without hesitation. We have always prioritised long-term market expansion over short-term margin. But right now, we don't need to make any trade-off."
Swiggy's strategy? Eternal isn't convinced: competition in quick commerce remains intense, but Eternal believes it doesn't need to chase every trend.
Swiggy recently launched Toing, while Rapido introduced Ownly, both targeting value-conscious customers with lower-priced meals.
Deepinder Goyal dismissed the strategy, saying customers are using these services mainly because they're cheaper, not because they solve a new problem.
"There's no new use case being unlocked here. The customer traction is purely price-driven, and price-driven traction without structural economics tends to resolve itself."
Instead of joining the discount battle, Eternal is betting on Bistro, Blinkit's food delivery offering, to serve customers looking for affordable, quick meals.
What management is watching: Eternal expects Blinkit's strong growth momentum to continue.
The company also said it isn't seeing any meaningful impact from rising fuel or raw material costs on the business. At the same time, management acknowledged that competition remains intense, but believes it has become more predictable, making it easier to plan investments and expansion.
