Blinkit powers Eternal's Q1 growth as taxes, investments weigh on profit

Eternal Ltd's June-quarter (Q1FY27) results underscored how rapidly Blinkit is reshaping the company. Revenue surged five-fold as the quick commerce business scaled aggressively, but higher taxes and continued spending on newer businesses kept profit growth subdued.

The Gurugram-based company reported consolidated revenue of ₹20,211 crore for Q1, up 182% from a year earlier and ahead of the ₹19,947 crore average estimate of 24 analysts polled by Bloomberg. Net profit rose 5% to ₹92 crore but missed the ₹300 crore consensus estimate based on 21 analyst forecasts, as a higher tax outgo and investments in newer businesses offset stronger operating profits from food delivery, quick commerce and Hyperpure.

Blinkit remained the company's largest business by revenue, contributing about 77.5% of consolidated revenue, up from 76.5% in the March quarter. Food delivery accounted for 15.3%, down from 15.8%, while Hyperpure contributed 5.1%, compared with 5.7% in the preceding quarter.

Eternal's shares closed 1.15% lower at ₹283.40 on the BSE on Wednesday.

Adjusted Ebitda improved for the fifth consecutive quarter to 0.6% of NOV, translating into a profit of ₹102 crore versus a loss of ₹162 crore a year earlier.

“We continue to focus our efforts on our three pillars of long-term growth—assortment expansion, geographical expansion, and demand densification. This quarter, we continued to make progress on assortment expansion in the top eight cities and geographic expansion in the next 30,” said Albinder Dhindsa, group chief executive officer (CEO) of Eternal, in the shareholder letter.

The company said it will roll out “gourmet” stores across select locations in the top eight cities to drive premiumization through curated premium brands. Mint was the first to report on the plans.

Blinkit fulfilled 156 million orders during the quarter and added 200 net new dark stores, taking its network to 2,443. Average NOV per store rose to about ₹11 lakh a day, well above the company's earlier long-term estimate of ₹7 lakh.

Management reiterated plans to keep investing aggressively in Blinkit, saying the business can generate a pre-tax ROCE of around 42% at steady state. Eternal has invested about ₹3,000 crore over the past four years to build nearly 19 million sq. ft of quick commerce infrastructure across more than 300 cities.

“We don't think about it as a trade-off. If we're doing our job well, growth and margins should compound together because growth in this business comes from making the platform more useful to more people, which drives frequency, density and efficiency,” vice-chairman Deepinder Goyal said.

“If there comes a point where we have to spend margin to grow, we will—without hesitation. But right now, the business is growing because it's getting better, not because we're buying growth,” he added.

Dhindsa said Blinkit's edge comes from infrastructure rather than pricing.

“Competitive intensity remains high but has become more predictable. We're the only player simultaneously investing in assortment depth, geographic expansion and supply chain infrastructure, while competitors generally remain focused primarily on pricing,” he said. “Infrastructure-led growth builds operating leverage—each new store, each new category and each new city adds capacity that serves more customers at lower marginal cost. That's why we can grow rapidly and improve profitability at the same time.”

The company said customer retention remained resilient despite aggressive pricing by competitors. The latest customer cohorts are seeing around 50% retention after four quarters, broadly in line with the March quarter, while spending by retained users continues to increase over time.

Hyperpure reported revenue of ₹1,034 crore. On a like-for-like basis, revenue grew 27% year-on-year, while adjusted Ebitda turned positive at ₹6 crore versus a loss of ₹18 crore a year earlier.

Eternal also said Bistro, its 10-minute food delivery service, has crossed 100,000 daily orders.

Nugget, its AI-powered customer support platform, has begun serving external enterprise customers after initially being deployed internally. Management said the product remains at an early stage but could become another long-term growth business.