While Blinkit’s average order value (AOV) dipped marginally, a large increase in monthly transacting users (MTU) and increased frequency of transactions demonstrated its ability to gain market share.
Eternal’s consolidated revenue was ₹20,211 crore, up 182 per cent year-on-year (Y-o-Y) and 17 per cent Q-o-Q. Reported earnings before interest, taxes, depreciation and amortisation (Ebitda) was ₹598 crore, up 416 per cent Y-o-Y and 22 per cent Q-o-Q with a 2.9 per cent margin, up 133 basis points (bps) Y-o-Y. The reported net profit was ₹92 crore, up 268 per cent Y-o-Y — pulled down by a higher tax outgo of ₹180 crore as the carried-forward losses were fully neutralised in FY27. Reported net profit was down 47 per cent Q-o-Q.
Food delivery contributed 15 per cent of Q1 revenue with MTU at over 27 million (a growth of 18.8 per cent). The Zomato food delivery NOV also grew by 20.1 per cent Y-o-Y vs 18.8 per cent in Q4FY26, with margin expansion leading to adjusted Ebitda growth of 34.4 per cent Y-o-Y at ₹606 crore with 17 bps Q-o-Q margin expansion (60 bps Y-o-Y). The robust food delivery growth is due to higher density and improved monetisation (a rise of 80 bps Q-o-Q) in take-rate to 32.8 per cent of NOV.
Blinkit contributed 78 per cent of Q1 revenue. Blinkit’s NOV went to ₹7,130 crore in the quarter under review with a focus on growth resulting in 1.8 per cent Q-o-Q decline in net average order value (NAOV) to ₹518, while MTU growth also rose to 16.9 per cent (vs 15.3 per cent in Q4FY26) and frequency of orders increased (3.47 in Q1FY27 vs 3.36 in Q4FY26). The take rate increased by 60 bps Q-o-Q to 27.5 per cent, though the 2.0 per cent Q-o-Q rise in direct costs/order to ₹115 meant a 10 bps decline in contribution margin to 4 per cent. The increase in direct cost is due to some states implementing minimum wages and higher delivery payouts. 200 dark stores were added, taking the cumulative count to 2,443.
Hyperpure revenue has stabilised at ₹1,000 crore, with adjusted Ebitda at ₹10 crore. District’s NOV is ₹3,218 crore, up 60 per cent Y-o-Y with loss down to ₹65 crore. The Hyperpure like-for-like (LFL) revenue is up 27 per cent Y-o-Y. Nugget (the R&D AI segment) is being hived off to Carthero (CTPL) via a ₹35 crore slump sale.
Given the qcom opportunity across India, which has a long growth runway, and Blinkit’s superior execution, it is well placed to take more market share. The newer segments, District and Bistro, continue to broaden the ecosystem and drive engagement and the adjusted Ebitda margin improved by 100 bps Q-o-Q to minus 2 per cent of NOV.
Blinkit has built market leadership through good sourcing, tight inventory management and aggressive categorisation along with a fast geographical expansion into Tier-III and -IV cities where it now has significant first-mover advantage. The unit economics appear to be good, and there are robust cash reserves to back up the expansion of what is India’s largest fulfilment network. Blinkit could be well positioned to continue capturing market share of the qcom market without a dip in profitability even as it expands.
The food delivery business is a steady cash earner. The market structure is an effective duopoly and there’s a moat because huge investments and high cash-burn would be required to enter this market for a newcomer challenging Swiggy or Zomato. Moreover, Zomato holds the lead with the larger market share. The key risk would be further rise in competitive intensity leading to price wars or market share erosion. Labour costs could also rise.
Eternal is guiding for 40 per cent return on capital employed (ROCE) for the qcom business at steady-state, despite the ₹2.5 crore capex per store and 12-days of working capital. At steady-state, the Ebitda margin may reach 6 per cent. The long-term guidance is $3 billion NOV and $150 million Ebitda by FY30 which was reiterated.
The long-term adjusted Ebitda margin target is 6 per cent of NOV and the company is prepared to further accelerate capex intensity as capex per store targets rise to ₹2.5 crore per store from an earlier₹1 crore each. The valuations seem to have stabilised as the competitive situation in food delivery has eased and many analysts believe that QC competitive intensity has also peaked.
The writer is a New Delhi-based independent journalist
 "Eternal (formerly known as Zomato)")